Kentucky Bourbon Makers Demonstrated Their Displeasure on the Steps of the Kentucky Legislature

Passed on Friday the 13th, takes effect on April Fool’s Day. It’s the new 6% tax on alcohol.

Naturally the Kentucky Distillers Association is not pleased about having the charge the tax. Eric Gregory, president of the KDA says 53% of the price of the average bottle of spirits is taxes.

Kentucky already has the third-highest effective tax rate on spirits in the country, and is the highest among most neighboring states.

“The legislature has really put Kentucky’s signature bourbon industry over a barrel with this unfair tax scheme,” he said. “It’s a double tax that puts Kentucky at a significant competitive disadvantage with surrounding states and the rest of the country.”

The KDA is closely monitoring sales and tax figures for any impact on the historic industry.

“That raised a red flag and we’ll be watching to see if it’s a trend,” Gregory said. “Everyone understands that the economy is down, which is why we argued for a more comprehensive solution instead of a short-term fix.”

Gregory also expressed concern about potential harm to the 3,470 retailers that will be collecting the tax, as well as the tourism and hospitality industries. Only 30 of Kentucky’s 120 counties are wet, although revenue from alcohol taxes is distributed statewide, including dry counties.

Gregory said he is looking forward to streamlining Kentucky’s beverage alcohol taxes when the legislature takes up comprehensive tax reform. “Kentucky bourbon is a home-grown industry that deserves better treatment. This might be April Fool’s Day, but we’re not laughing.”