NASHVILLE, Tenn. (AP) — Tennessee’s attorney general says the state constitution doesn’t exempt whiskey barrels from property taxes.
Attorney General Herbert Slatery’s opinion comes as Jack Daniel’s and others push barrel exemption legislation.
That bill says the constitution already exempts them by saying, “No article, manufactured of the produce of this State shall be taxed otherwise than to pay inspection fees.”
The opinion concludes whiskey barrels aren’t “manufactured articles” because they aren’t converted into different items.
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The Tennessee Distillers Guild contends aging whiskey converts barrels into different products sold for different purposes, exempting them.
A local audit deemed Jack Daniel’s barrels taxable. The company says it hasn’t had to pay the tax at least since Prohibition ended eight decades ago.
A legislative analysis says the tax would cost Jack Daniel’s $2.8 million this year.