Beshear Wants Commission to Examine Barrel Tax

Kentucky's bourbon distillers may soon be getting one of their biggest wishes… a change in the barrel tax.

The tax, named because it charges property taxes on bourbon aging in barrels in distillery warehouses, is one of its kind.

But other alcoholic beverages made it the commonwealth aren't subject to the same taxes, Beshear says.

It is the only such tax in the world and it's not assessed in Kentucky on any other alcoholic beverage such as beer, vodka or scotch whiskey, he said.

At a news conference celebrating the industry this week, Beshear strongly hinted that he'd like his tax reform commission to look at that tax.

As my tax reform task force meets throughout this year to study how we can better align our tax structure with the principles of fairness and economic competitiveness the barrel tax will be one of those taxes that we really need to look at, Beshear said.

Distillers would like the tax to turn into a tax credit, where the extra money will go to capital improvements for their businesses.

The barrel tax is a two-layered tax, where part goes to local communities and other parts go to the state.