Bourbon production up, KY Governor wants review on barrel tax

FRANKFORT, KY (WAVE) - The Governor of Kentucky is saying bourbon may be taxed too much.  In these tough economic times bourbon and alcohol taxes have brought in a lot of revenue, but Gov. Steve Beshear is concerned that the taxes are a burden on the state's signature industry.

There are pieces of Kentucky all over the world. Bourbon is exported to 260 different countries.

"It's America's native spirit," said Ellen Crouch, English Bar Manager at the Brown Hotel. "So that speaks volumes for the whole nation."

Crouch says dozens of people come in every month on the Urban Bourbon Trail, developed in 2008. People have a passport and get stamped at select bars across Louisville, which produces 1/3 of the state's bourbon. This is just one attraction in the state that produces 95 percent of the world's bourbon. According to the Governor, the industry that has increased 50 percent since 1999.

"During the worst economic crisis and recession of our lifetimes, the bourbon industry has been a very bright spot," said Beshear.

According to The Economic and Fiscal Impacts of the Distilling Industry in Kentucky by Paul Cooms and Barry Kornstien at the University of Louisville, surging visitor's centers and investments in distilleries have created jobs and $338 million in additional tax revenue since 2008.

Not everyone, however, sees this revenue as a good thing.

"For Kentucky to maintain its dominance in the industry we must revise these burdensome tax policies that threaten to force distilling operations to move out of state," said David Adkisson, President and CEO of the Kentucky Chamber of Commerce.

According to the report Kentucky's taxes on spirits are some of the highest in the nation. The only two open market states higher are Alaska and Illinois.

Beshear is calling for a review of the barrel tax.

"I do think it's time to look at that tax," said Gov. Steve Beshear. "We've got a signature industry here, and we need to be treating them in such a way as they want to be here, and they want to stay here, and they want to grow here."

Kentucky currently hosts 43 percent of all distilling jobs in the country, according to that report.

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