What’s next for Bullitt Co. after the phase out of the bourbon barrel tax
LOUISVILLE, Ky. (WAVE) - Besides the Derby, Bourbon might be what Kentucky is most known for.
Five counties produce the majority of the bourbon in the state. Those are Bullitt, Nelson, Marion, Woodford, and Franklin.
In the last legislative session, a bill was passed that will phase out the tax on bourbon barrels aging in Kentucky.
Bullitt County has two distilleries, Jim Beam and Four Roses.
Between the two of them, they’ve paid millions of dollars in taxes for years, with the number going up every single year.
Now with that money scheduled to dry up, Bullitt County may need to find new revenue.
Before House Bill 5 passed, leaders from the bourbon counties met to discuss the bill.
Bullitt County Judge Executive Jerry Summers was at that meeting.
“Our fire department has made 48 runs to the number one distillery in the world in just this last year,” ,” Summers said at the meeting in February. “That fire department will go away if this tax goes away.”
That department is the Southeast Bullitt Fire Department, which is just down the road from the Jim Beam campus.
Southeast Bullitt’s total tax revenue in 2022 was just over a million dollars.
Over $400,000 of that came from the barrel tax from the two distilleries in Bullitt.
“All the chemicals that are involved with it, we have to protect the public from that,” Summers said. “And that’s a little more than just a fire department. That’s EMS, that’s fire, that’s sheriff, that’s emergency management, evacuations.”
The bill has been passed since that meeting in February, so what happens now for Bullitt County?
The final version of the bill says a replacement tax will be given to school districts and emergency services, in theory making them whole.
“Let’s put it this way,” Summers said. “I’m not a doubting Thomas, but I haven’t seen that to be the case so far.”
The bill will phase out the barrel tax by 2043, but Summer thinks the industry will try to shorten that time frame.
“I feel like they will come back in either this session in 2024 on the revenue side or 2026 to shorten up that phase-out period,” Summers said.
Summers now has the task of trying to replace millions of dollars of tax revenue.
He said the burden could fall onto the taxpayers, but he’s going to do what he can to make sure that doesn’t happen.
“We’re not going to put this back on the backs of our taxpayers in our community for an industry to walk in here and literally live here for nothing,” Summers said.
WAVE News asked Summers if he was optimistic about the future of their relationship with the bourbon industry and if he thinks they can work together so that everyone can get what they want.
He said no.
WAVE reached out to both Jim Beam and Four Roses to ask them the same question and is still waiting on a response.
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