The Whiskey Reviewer A World of Whiskey, Poured Every Weekday
By Richard Thomas
Kentucky’s Senators, Majority Leader Mitch McConnell and libertarian arch-scion Rand Paul, are not known for their close relations, but they joined forces earlier this week to jointly introduce a tax reform bill for their home state’s bourbon industry.
Their “Advancing Growth in the Economy through Distilled (AGED) Spirits Act” is aimed at changing when can claim tax exemptions for interest expenses. Under current law, distillers can claim expenses against their taxes only when the bourbon is sold, a distinction that amounts to a major investment of funds that won’t return to the distiller for years or even decades. McConnell and Paul propose that the claims be made in the year the whiskey is made.
McConnell described the current law as “akin to a homeowner not being able to deduct the interest on a home mortgage until the sale of the house.”
The postponement of making claims of this kind has long been considered a burden in the American whiskey industry, especially in the new craft whiskey sector. In the United Kingdom, where scotch whisky is made, interest expenses are currently allowed to be deducted in the year of capitalization, as proposed under the new law.
