Statement from Kentucky’s Bourbon Industry

on House Passage of HB 5

“The Kentucky Distillers’ Association thanks and applauds the Kentucky House of Representatives for passage of the common-sense compromise to House Bill 5, a long-term phase out of Kentucky’s discriminatory barrel tax on Bourbon that no distiller pays anywhere else in the world.

“We appreciate the leadership of A&R Chairman Jason Petrie and House Speaker David Osborne who put forth this compromise which addresses funding issues with schools, local fire and emergency services, and barrels under industrial revenue bond contracts.

“Distillers will continue to pay the punitive tax over the next 17 years, giving local communities a significant influx of revenue and ample time to diversify their budgets and plan for the future without having to depend on the success of a single industry.

“Most importantly, schools will be held harmless under the companion House Bill 447 should their funding decrease over the phase out. And distillers will be required to honor IRB contracts and commitments by continuing to pay taxes on those barrels.

“The KDA and its members have always asked to be treated just like every other industry in Kentucky. No other manufacturer pays taxes on its goods during production. Taxes aren’t levied on vehicles rolling down the assembly line, dish washers as they are being built, or tobacco drying in the barn.

“The distilling industry is the highest-taxed large manufacturing industry in Kentucky, and our companies already pay a multitude of other taxes like all other businesses including property, sales and use, local occupational taxes plus alcohol license fees at the state and local levels.

“Bourbon has been blessed with historic growth over the last decade, but Kentucky continues to lose out on the next generation of distillers and those jobs and investments. They are simply not coming to Kentucky, and the Bourbon barrel tax is a main reason why.

“Thank you to all House members who voted for these critical measures.

“We urge the Senate to pass House Bills 5 and 447 and keep Kentucky the one, true home of Bourbon.”

— KDA President Eric Gregory

Founded in 1880, the Kentucky Distillers’ Association is a 501(c)(6) non-profit trade association that passionately unites, promotes, protects and elevates the Commonwealth’s signature Bourbon and distilled spirits industry. Its diverse and growing membership produces the overwhelming majority of the world’s Bourbon, from legendary, global brands to emerging micro distilleries that are fostering the next generation of the Commonwealth’s timeless craft and treasured economic engine. The KDA maintains an open membership policy, champions a strong commitment to the responsible and moderate consumption of spirits, and fights to curb underage drinking and drunk driving.