Mayor Heaton calls on bourbon industry to compromise on barrel tax legislation
NC GAZETTE / WBRT RADIO
STAFF REPORT
Friday, Feb. 24, 2023 — Bardstown Mayor Dick Heaton is calling on the bourbon industry and the Kentucky Distillers Association to consider a compromise in regard to House Bill 5 that, if passed, will eliminate the bourbon barrel tax that brings millions to Nelson County schools and governments.
“The loss of the barrel tax as a whole will be devastating to our schools, governments and tax payers,” Heaton said, noting the bill is benefit the county’s distillers, but have a significant negative impact on the quality of life in Bardstown and Nelson County.
Heaton notes that the City of Bardstown and Nelson County have long worked closely to provide property tax and occupational tax abatements as incentives for distilleries opening or expanding their facilities in Nelson County.
Mayor Heaton’s statement is as follows:
“There is a long history of the Distillery Industry in Bardstown and Nelson County. Our distilleries have been a great asset and partner for our local governments, schools and other agencies.
“Judge Hutchins has laid out the major impact of a recently filed bill in the House of Representatives known as HB 5. In recent years both the City and County governments have worked closely with these businesses to provide incentives for many expansions that have been made and are planned in the near future through the issuance of Industrial Revenue Bonds (IRB’s) and Occupational License Tax abatements. These bonds abate property taxes for 30 years in most cases. The rebate of Occupational license fees lasts for 10 years. These tax incentives were approved by local authorities with the understanding that there would be additional barrel tax income as a result of these expansions. As it stands now, our distilleries collectively receive as much or more abatement of property tax as they pay in barrel tax here in Nelson County. I must point out that not all of the distilleries have IRB’s in place at this time.
“There has been and will be significant impact on our local infrastructure and need for services that the local governments provide with the growth of our distilleries. It is my understanding there is no language in the current bill that will allow Nelson County or the City of Bardstown to recover the property tax abatements and occupational tax abatements that will be in place if
and when HB 5 goes in to affect. The loss of the barrel tax as a whole will be devastating to our schools, governments and taxpayers. It would seem that this bill is very one-sided in the positive impact it will have on our local industries and the very negative impact it will have on our quality of life here in Bardstown and Nelson County.
“This is a very complicated issue. HB 5 in its current state is a very bad bill for many school districts and local governments in our state. It is a very good bill for the distillers and their profitability. I am not naive enough to think this issue and the push to lower taxes on the distilleries is going away. I think there is a significant need for more discussion and compromise in regards to this bill. The City of Bardstown and the Kentucky League of Cities are ready to be part of that discussion.
“I am asking that our local Distillery partners and the Kentucky Distillers Association come to us with a plan that works well for all the parties involved in this legislation.
Dick Heaton
Mayor of Bardstown
