Congressman Andy Barr (KY-6) today introduced the Aged Distilled Spirits Competitiveness Act of 2015. The aging process is essential to producing high quality Kentucky bourbon. However, the U.S. tax code discriminates against this process by not allowing distillers to deduct inventory expenses until the final product is sold, which can take from two to more than 20 years. Distillers of other spirits such as vodka are able to deduct these expenses right away because their products are not aged.
Congressman Barr’s bill would allow bourbon, whisky, and other distillers of aged spirits to deduct interest expenses of their inventories as they occur. This change would make the tax treatment of bourbon comparable to other distilled spirits, and improve its competitiveness in the growing international market.
“Kentucky’s bourbon industry is thriving – providing much needed jobs, investment, and economic growth in the Commonwealth,” said Congressman Barr. “As the domestic and international markets for distilled spirits grow, it is important that we reform our outdated and complex tax code to eliminate the practice of putting Kentucky products at a competitive disadvantage. This bill is a commonsense fix which would treat bourbon and other aged spirits fairly for tax purposes, helping support jobs for Kentucky families and our local economy.”
Congressman Barr introduced the Aged Distilled Spirits Competitiveness Act along with original cosponsors: Congressman Ed Whitfield (KY-1), Congressman Brett Guthrie (KY-2), Congressman John Yarmuth (KY-3), Congressman Thomas Massie (KY-4), Congressman Hal Rogers (KY-5), Congressman Stephen Fincher (TN-8), and Congressman Steve Cohen (TN-9).
What others are saying about the Aged Distilled Spirits Competitiveness Act:
“The Kentucky Distillers’ Association and our 27 members applaud Congressman Barr for his leadership on this critical issue. Kentucky is the one, true and authentic home for Bourbon, and our signature industry is on the cusp of a Golden Age. Relief from the discriminatory capitalized interest issue will create a level playing field and strengthen the growing Bourbon renaissance. The KDA stands ready to assist Congressman Barr and protect America’s only native spirit.” - Eric Gregory, President of the Kentucky Distillers’ Association, a non-profit trade group founded in 1880.
“The filing of this bill is an important step to the growth of the bourbon industry. Removing a measure that discriminates against bourbon will allow all distilleries to better compete against all other spirits, both domestically and internationally. It will also allow all of us to distill more bourbon, which unfortunately is in short supply due to measures like this, the aging required, and growing demand. I commend Congressman Barr for his willingness to stand up for Kentucky’s bourbon industry. We look forward to working with the Congressman and the rest of Kentucky’s federal delegation to continue to grow the bourbon industry. ” - Mark Brown, President and CEO of Buffalo Trace Distillery which has operations in Frankfort, Bardstown, and Owensboro, Kentucky.