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WKYT Reality Check: Small batch distilleries want tax break

LEXINGTON, Ky. (WKYT) - The industry is booming! For the first time since 1973, Kentucky's distilleries produced one million barrels of bourbon in a year.

A lot of small batch distilleries are hoping to cash in on the popularity of the product, but they say Uncle Sam is holding them back.

"Everything's done by hand. With two of us right now. We bottle it, cork it, label it all by hand," describes The Barrel House Distilling Company's Jeff Wiseman.

Distilling for Wiseman, in five years time, has gone from a hobby to a business. He'd eventually like to make it a career, but taxes are taking a toll.

"We pay the same as all the big distilleries right now. Not only in federal tax, but also in licensing fees and those kind of things," explains Wiseman, "our tax account is much bigger than our operations account I'll put it that way. So we'd like to take some of that money from our tax account and be able to move it over to operations to expand and hire some folks."

Wiseman is one of many small batch distillers fighting for a tax credit similar to one microbreweries and wineries already get. Right now, he pays the same amount as the big distilleries.

"The bourbon industry is one of the most taxed industries in the United States. We have to pay a tax on every year our product sits in the barrel. Once again, no other whiskey in the world has to do that," Woodford Reserve's Master Distiller Chris Morris tells us, "we're moving forward, but tax relief would allow us to reinvest in our industry and prepare to be even stronger in the future."

Wiseman says the benefits of a tax break would help people outside the bourbon industry as well.

"Not only is it gonna help us, but it's also gonna help all our suppliers. Our farm, do everything from packaging, to farmers, to transportation companies, truck drivers. We're anticipating it will add two to three jobs here, just at the distillery, at this distillery, but then it would also add another 8 to 10 possibly 12 jobs in agriculture and trucking and those supplier jobs for us."

Distillers are hopeful the bill will budge in Washington.

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