FRANKFORT, Ky. (FOX 56) — The Kentucky House has passed House Bill 5 — the bourbon barrel tax repeal.

The bill would repeal taxes on stored bourbon barrels in Kentucky. Leading some school superintendents to protest the loss of tax revenue to their districts.

Supporters said the bill will keep the industry in Kentucky — with some companies threatening to leave if the tax is not repealed.

The bill now heads to the Senate for a vote.

In 2022, the Kentucky Distillers Associated told FOX 56 the tax has already impacted the state and it will continue to until it is removed.

This begs the question from the association, as to why distillers are not located in Kentucky, Gregory said feedback from the distillers said it’s because of the sales tax.

“We use to have almost 50% of distillery jobs in the country, we are now about 30%, and we got distilleries in 40 counties- which is an all-time high but that means there are 80 counties in Kentucky that could be taking part in the bourbon boom,” said Eric Gregory, president of the Kentucky distillers.

But in February Jessamine County officials, called for the tax to stay due to the major impacts it has on many Kentucky county services.

“As of now, our district stands to lose $265,000 of revenue annually. For us, that
amount is equivalent to five teachers, or 15 bus drivers, or four counselors. And several districts
will lose much, much more than that, some into the millions of dollars,” Jessamine County School Superintendent Matt Moore wrote in a statement.

His statement was accompanied by other Jessamine County officials who said their parts of the would also be hurt by repealing the tax, saying police, firefighters, local health departments, and other government services all rely on the bourbon barrel tax revenue.

“Just as our citizens do their part to help fund essential services including police, fire,
schools, and libraries, the bourbon industry that is benefiting from many of these very same
services should also do their part,” Nicholasville Mayor Alex Carter wrote in the release.