Kentucky’s bourbon industry won a legislative victory Thursday with a plan for a 20-year phase-out of the barrel tax.
The Senate voted 23-14 on the final day of the legislative session to approve the House bill. Jack Mazurak is governmental and regulatory affairs director for the Kentucky Distillers’ Association. He told lawmakers the continuation of the per-barrel tax would slow growth.
Mazurak said some of the 68 counties that currently don’t have distilleries would like “a bite of the apple.”
“A lot of them want the jobs, the tourism, the infrastructure, the development, especially those that are too painfully close to the coal industry’s collapse,” Mazurak said.
Three local government officials expressed concern about the loss of revenue over time. Bardstown Mayor Dick Heaton said with the massive growth of the bourbon industry in Kentucky, it seems contradictory to ask for tax relief. Heaton said the addition of distilleries can stress local water systems and truck traffic could hasten road repairs.
“These new distilleries come in with these huge capacities. That is what’s creating the problem that there’s not enough capacity and not enough infrastructure there to get them this massive amount of water they need and the flows they need. It’s very complicated,” said Heaton.
The bill now heads to Governor Beshear for his consideration.
