Ky. Distillers Association hopes to ease restrictions on distilleries in next year's session

10/15/2015 06:45 PM

CLERMONT – The Kentucky Distillers Association will seek a number of legislative remedies aimed to boost tourism in the state’s bourbon industry, officials told lawmakers Thursday.

The association presented its legislative wish-list ahead of next year’s session during a joint meeting of the interim joint committees on labor and industry and economic development and tourism at the Jim Beam American Stillhouse.

Kristin Meadors, the distillers association’s director of governmental and regulatory affairs, said her group will ask the General Assembly to increase the 3-liter limit for alcohol purchases at distilleries, increase sample sizes, allow local-option precinct elections for distilleries, authorize retail sales of antique liquors and give distilleries the authority to sell drinks as breweries and wineries can.

Those changes would generate an estimated $2 million per year, according to a University of Louisville Urban Studies Institute study cited by Meadors.

“Fred’s Smokehouse is right here behind us,” Meadors said. “We’d love for the visitors when they’re here on premise to have a wonderful lunch while they’re here, but when they walk into Fred’s Smokehouse the only thing that we can legally serve them, lemonade, soft drinks, water and tea. By law we cannot serve you a Manhattan, a whiskey sour, a whiskey and Coke.”

“We understand bourbon is a little bit harsh initially, but we make some really fine cocktails,” she continued.

While Kentucky produces 95 percent of the world’s bourbon, other states have added distilleries, particularly craft operations.

Kentucky had 13 craft distilleries as of 2014, up from none in 2005, according to information provided by the distillers association. In the same time period, numbers have soared in other states, with Washington leading the country at 74 craft distilleries compared to zero in 2005, 57 in California and 52 in New York.

The state ranks eighth overall in the number of distilleries, Meadors said, noting that other states have relaxed laws and regulations governing their liquor industries.

“Rhode Island recently completely exempted wine and spirits from their sales tax,” she said. “In 2009, we added a sales tax to the sale of alcohol here in Kentucky. Colorado, they recently enacted legislation to have distillery pubs. In New York, what Gov. (Andrew) Cuomo and his administration and legislature have done to increase marketing funds to cut the bureaucratic red tape and allow distilleries and restaurants to have sales by the drinks has turned into very successful distilleries in their state.”

Senate Majority Caucus Chairman Dan Seum voiced his support for again exempting distilled spirits from the state’s 6 percent sales tax. The General Assembly made the sale of packaged liquor, beer and wine taxable under House Bill 144 in 2009.

“A lot of people don’t realize there is an 11 percent sales tax at the wholesale level and then we added the 6 percent to retail, which put us at 17 percent or close to it,” said Seum, R-Fairdale. “So I do think they’re overtaxed. It’s an industry that obviously wants to pay its fair share, but that’s probably over the top.”


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