Beshear Signs Bill Granting Tax Relief To Bourbon Distillers

Apr 15, 2014

Bourbon makers in the Bluegrass are set to receive a tax credit to offset what’s known as the “barrel tax.” 

Gov. Steve Beshear signs House Bill 445
Credit Josh James / WUKY

At a ceremonial signing Tuesday, Gov. Steve Beshear said House Bill 445 will ease the burden on distillers when it comes to the 4.9 million barrels of bourbon currently aging in Kentucky.

"Those barrels not only age, but they're taxed, driving up the cost for consumers and putting our distillers at a disadvantage against the producers of other spirits," he said.

The tax credit to be phased in over five years is part of Beshear’s larger tax modernization plan. Distillers will be required to use the funds for capital improvements, construction, renovation, and tourism related facilities.

The barrel tax generates an estimated $14 million annually in state and local tax dollars.