Washington, DC – Last week, Congressman Andy Barr (KY-06) introduced H.R. 6737 to cut red tape and enable bourbon distillers in Kentucky and throughout the nation to produce sanitizer to aid in the fight against the COVID-19 pandemic. This bill, which is the companion to legislation introduced by Senator Rand Paul (R-KY) recently in the U.S. Senate, would eliminate during pendency of the national emergency the U.S. Food and Drug Administration’s (FDA) requirement that the alcohol in hand sanitizer be denatured.
“I am so proud of our distillers in Kentucky who stand ready to provide their skill and expertise to produce hand sanitizer, which is a simple but critical line of defense against this virus,” said Congressman Barr. “Unfortunately, bureaucratic red-tape in Washington is keeping our distillers sidelined in the fight against this virus. Through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, we changed the law to allow the creativity and innovation of the private sector to contribute to the fight against this virus without having to incur the burden of the federal excise tax. But because the FDA continues to stand in the way, I am introducing this legislation to permit our distilleries to manufacture undenatured alcohol exempt from federal tax during this emergency, which would significantly increase our nationwide supply of hand sanitizer.”
“Requests for hand sanitizer are pouring in as more businesses and sectors of our economy are opening back up,” said Eric Gregory, President on the Kentucky Distillers’ Association. Our signature distilling industry needs the flexibility from the FDA to allow them to make more sanitizer without getting an unnecessary tax bill from the federal government, especially when distillers are donating tens of thousands of gallons to hospitals, first responders and emergency personnel. We appreciate Congressman Barr’s leadership in helping our distillers and the people and businesses of Kentucky with this desperately needed change."
During their normal production, distillers are required to pay a federal excise tax by the gallon for the spirits they produce. Many distillers in Kentucky have been making hand sanitizer to donate to the community, all the while accruing this tax on each gallon they distributed. Congressman Barr worked with Congressman Kevin Brady, Ranking Member of the Ways and Means Committee, to insert language into the CARES Act that would exempt distillers from this tax while they produce hand sanitizer during the pandemic.
The language within the CARES Act is subject to guidance from the FDA. This guidance, unfortunately, still requires that alcohol be denatured to avoid this federal excise tax. Placing denaturants into the same lines that produce bourbon causes damage to the equipment that could hinder distilleries from producing bourbon once the demand for hand sanitizer subsides and normal distilling operations resume. Congressman Barr advocated a change in the FDA guidance in talks with the White House, but the FDA continues to block this simple administrative solution.
Congressman Barr’s bill removes the denaturing requirement from hand sanitizer produced by distilleries during the public health emergency. With this crucial legislation, distillers will be able to produce hand sanitizer and supply their communities, first responders and emergency personnel with a product to help fight the spread of the virus without the worry of a tax bill that could cost them their business.