Please Oppose Alcohol Tax Increase!

Brad,

It would seem like it, but not really. There is a separate law that allows them to taste- which restricts you to two 1/2 oz samples. Originally they couldn't do any tastings. Presumably the limit is so they can't compete with bars by tasting more, and also to restrict drunkeness.
Deb

Well, that makes more sense. I was just disappointed after my Woodford tour back in the fall. It was a beautiful afternoon, and I wanted to sit out on the porch for awhile sipping bourbon, and that 1 oz. went WAY too fast. It seems like they should at least be able to give you one nice three-finger pour.

Years ago I worked in the retail business. The state legislature had passed the, if I remember correctly, 11% wholesale tax. The beer distributors were to pay the tax on their current inventories and on all future products sold to retailers. On its effective date, all the beer wholesalers immediately raised their wholesale cost to the retailers by 11%. Since we had advanced copy of the "cost" increase, that same day, we, and all retailers in the market area, raised retail prices 11%. We also reprogrammed the cash register beer "key" from taxable to non-taxable for the consumer. The tax was still there, just in the new, higher retail instead of added at the end of the transaction as sales tax.

HB 144 narrowly passed today, 24-12 (23 votes needed). 12 Democrats and 12 Republicans voted for it.

Politicians from across the country will now start to court our KY beverage companies to come to their states. This is so shortsighted in my opinion on the part of the KY Legislature. The least they could have done in passing this law was funnel the money from the sales tax ONLY to the wet counties.

Actually you CAN buy distilled spirits ( eg. Bourbon) at the distillery- they sell it at the gift shops at all the Bourbon Distillery tours. There is a special exception in the legistation designed specifically for this. But here's the ironic part: the distillers have to sell it to a wholesaler, who then delivers it to the distillery's gift shop. In the case of Heaven Hill, ( and others) that means the liquor goes from Bardstown to Louisville, to then be delivered to the Bourbon Heritage Center- which is 250 feet from where it's bottled. That way the tax still gets paid....
Deb

Funny you should mention this. We went to the Bourbon Heritage Center during our last trip to Kentucky, and on the way out I puchased a bottle of Elijah Craig Single Barrel. When we got home I checked the prices to find out that it's actually less expensive to buy it here.

Oh well, I guess when we move to Louisville we'll just have to make our own

Assuming that the final bill contained just an increase of the sales tax on alcohol, I can not understand why would a distiller want to leave the state. It does not effect their costs of doing business, unlike an excise tax that directly effects them. For a wholesaler, their costs of doing business have not gone up, and for the retailer the costs have not gone up. This only effects the end consumer with a 6% increase now at the end of the sale.

There might be a slight dip in sales initially, but after 4 years of running a package liquor store, and having the store in my family most of my life, the customers will come back, if they ever leave at all. This might effect their buying decision a bit, but when buying anything else that has sales tax, how much does it directly effect what you are going to buy?

While I understand why the distillers are raising hell over this, in the end it will not add to their costs, and will possibly cause a slight dip in their sales, but people will still come back and buy their products in the end. If a state decided to charge sales tax on crackers, which as a food item is not taxed currently, is Keebler going to move production from one state to another?

You make good points, Todd, but some concern comes from quotes like this from Brown-Foreman's CFO, Don Berg: "[A]s we look to the future and think about where we should make new investments and place additional jobs, it seems we'll have no choice but to look for a friendlier state. … No one wants to invest in a state that eats their own."

Of course, this could be a sort of stimulus in the short-term. The tax doesn't take effect until April 1, so maybe folks will run out and stock up on booze and smokes.

Politicians from across the country will now start to court our KY beverage companies to come to their states. This is so shortsighted in my opinion on the part of the KY Legislature.

Congressman Baron Hill from Indiana has written a letter to Paul Varga CEO of Brown Forman doing just that.