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senate Bill S. 1179

Making Tax Cuts for Bourbon Storage Available Sooner

Argument in favor

Giving people tax deductions up front for aging bourbon will allow more people to afford to age bourbon for their business.

Edward's Opinion
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06/01/2015
Multi-year business storage costs are a deductible expense in almost any other business. Why not here?
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Michael's Opinion
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08/09/2015
It's a treasured national export. Let's not make it harder to produce.
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DEGUp's Opinion
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12/14/2016
Or better yet simplify the tax code for everyone, personal and business, no deductions & low rates.
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Argument opposed

This bill is just disguised tax cuts directed at people in one state: Kentucky. Kentucky already produces most of the world's bourbon, there's no need for more incentives.

Steven's Opinion
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01/21/2016
Alcohol is a drug, and it sells itself, I don't care to subsidize it. I feel mo sympathy for the alcohol industry.
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StratonGarrard's Opinion
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05/23/2015
We've had this problem since before the beginning of our country. The government must realize that not allowing its citizens to choose how to tax their favorite beverage is a gross mistake and only leads to protest.
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Elinor's Opinion
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06/18/2015
Really? This is important for our country?
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The house has not voted
  • The senate has not voted
      senate Committees
      Committee on Finance
    IntroducedMay 4th, 2015

What is Senate Bill S. 1179?

This bill would allow bourbon producers  to exempt the cost of bourbon's “aging process” from normal inventory rules so that it qualifies as a business inventory expense, allowing them to collect tax deductions sooner.

Currently, bourbon producers have to wait until after the aging process to claim the tax deduction; that is, the bourbon must be ready to be poured down consumers' throats before the exemption kicks in. The bill would allow bourbon producers to collect the deduction up-front, while the bourbon is in the process of aging, in order to pay off expenses incurred during aging.

Impact

U.S. bourbon producers; bourbon consumers.

Cost of Senate Bill S. 1179

A CBO cost estimate is unavailable.

More Information

In Depth: Sponsoring Sen. Mitch McConnell explained in a press release that the bill would prevent bourbon producers from having to pay the expenses for aging bourbon before receiving the tax deduction for the expenses:
"[The bill would permit] American Bourbon and whiskey producers to deduct interest expense associated with production in the year it is paid by exempting the natural aging process in the determination of the production period for distilled spirits. Making this change in law is a matter of common sense. The situation under current law, where American Bourbon and whiskey producers are not allowed to deduct the expenses related to storing and aging their product until it is bottled and sold, is akin to a homeowner not being able to deduct the interest on a home mortgage until the sale of the house."
Of Note: Similar legislation has been proposed before. Currently, there is very similar legislation to this bill in the House. That similar legislation was introduced to the House in 2013, with a  companion bill in the Senate, but neither reached a vote. That legislation was originally introduced to the House in 2011, but never reached the floor of the House for a vote.

All the members of Congress who have introduced similar legislation have been from Kentucky. This is because 95% of the world's bourbon supply is produced in Kentucky. According to McConnell's press release, the bourbon industry supports upwards of 15,000 jobs. The Kentucky Distillers' Association estimates that about $1.5 billion of Kentucky bourbon is sold per year.

Media:
(Photo Credit: Flickr user snickclunk)

AKA

Advancing Growth in the Economy through Distilled Spirits Act

Official Title

A bill to exempt the aging process of distilled spirits from the production period for purposes of capitalization of interest costs.