Kentucky Statutes 132.140 – Assessment of distilled spirits by department — Maximum tax rate on distilled spirits in barrels located in bonded warehouse or premises — Failure to report
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(1) The department shall fix the value of the distilled spirits for the purpose of taxation, assess the same at its fair cash value, estimated at the price it would bring at a fair voluntary sale, calculate the exempt portion of the property taxes, and keep a record of the valuations and assessments. The department shall immediately notify the owner or proprietor of the bonded warehouse or premises of the amount fixed, including the portion of the property tax exemption as calculated in subsection (3) of this section.
(2) (a) For purposes of this subsection only:
1. “Premises” means a bonded warehouse containing distilled spirits:
a. The costs of which are financed by one (1) or more series of industrial bonds under KRS Chapter 103 issued prior to January 1,
2024; and
b. Any portion of the costs of which remains financed by those bonds during any portion of the calendar year; and
2. “Taxpayer” means the owner, proprietor, or custodian of one (1) or more premises.
(b) Notwithstanding subsection (3) of this section, the state and local tax rate that may be levied on distilled spirits for a taxpayer of a premises shall be the state and local tax rate for tax assessments made on January 1, 2023.
(c) Distilled spirits stored or aging in barrels located in a bonded warehouse or premises shall be exempt from state and local ad valorem taxes for tax assessments made on or after January 1, 2043.
(3) The maximum state and local tax rate that may be levied on distilled spirits stored or aging in barrels located in a bonded warehouse or premises shall be as follows:
(a) Ninety-six percent (96%) of the otherwise applicable tax rate for tax assessments made on January 1, 2026;
(b) Ninety-two percent (92%) of the otherwise applicable tax rate for tax assessments made on January 1, 2027;
(c) Eighty-eight percent (88%) of the otherwise applicable tax rate for tax assessments made on January 1, 2028;
(d) Eighty-four percent (84%) of the otherwise applicable tax rate for tax assessments made on January 1, 2029;
(e) Eighty percent (80%) of the otherwise applicable tax rate for tax assessments made on January 1, 2030;
(f) Seventy-six percent (76%) of the otherwise applicable tax rate for tax assessments made on January 1, 2031;
(g) Seventy-two percent (72%) of the otherwise applicable tax rate for tax assessments made on January 1, 2032;
(h) Sixty-eight percent (68%) of the otherwise applicable tax rate for tax assessments made on January 1, 2033;
(i) Sixty-one percent (61%) of the otherwise applicable tax rate for tax assessments made on January 1, 2034;
(j) Fifty-four percent (54%) of the otherwise applicable tax rate for tax assessments made on January 1, 2035;
(k) Forty-four percent (44%) of the otherwise applicable tax rate for tax assessments made on January 1, 2036;
(l) Thirty-eight percent (38%) of the otherwise applicable tax rate for tax assessments made on January 1, 2037;
(m) Thirty-two percent (32%) of the otherwise applicable tax rate for tax assessments made on January 1, 2038;
(n) Twenty-four percent (24%) of the otherwise applicable tax rate for tax assessments made on January 1, 2039;
(o) Twenty percent (20%) of the otherwise applicable tax rate for tax assessments made on January 1, 2040;
(p) Fifteen percent (15%) of the otherwise applicable tax rate for tax assessments made on January 1, 2041; and
(q) Eight percent (8%) of the otherwise applicable tax rate for tax assessments made on January 1, 2042.
(4) Distilled spirits stored or aging in barrels located in a bonded warehouse or premises shall be exempt from state and local ad valorem taxes for tax assessments made on or after January 1, 2043.
(5) If any owner, proprietor, or custodian of a bonded warehouse or premises fails to make the report required by KRS § 132.130, the department shall ascertain the necessary facts required to be reported. For that purpose the department shall have access to the records of the owner, proprietor, or custodian; and the assessment shall be made and taxes collected thereon, with interest and penalties, as though regularly reported.
(6) The assessment made under (1) of this section shall be reviewed according to KRS
131.110.
Effective: March 31, 2023
History: Amended 2023 Ky. Acts ch. 148, sec. 1, effective March 31, 2023. — Amended 2005 Ky. Acts ch. 85, sec. 179, effective June 20, 2005. — Repealed and reenacted 1990 Ky. Acts ch. 476, Pt.V, sec. 317, effective July 13, 1990. — Amended
1966 Ky. Acts ch. 254, sec. 2. — Amended 1964 Ky. Acts ch. 141, sec. 33. — Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 4106, 4107, 4113.
Legislative Research Commission Note (3/31/2023). 2023 Ky. Acts ch. 148, sec. 12, reads as follows: “Any settlement agreement between the Department of Revenue and any taxpayer having distilled spirits in a bonding warehouse, which is related to the ongoing assessment or collection of tax under Section 1 of this Act [this statute], shall not be considered null and void based upon the statutory changes in this Act but may be renegotiated by the parties to the settlement agreement and the renegotiated agreement shall be promulgated in an administrative regulation following the renegotiation process.”
(2) (a) For purposes of this subsection only:
Terms Used In Kentucky Statutes 132.140
- Department: means the Department of Revenue. See Kentucky Statutes 132.010
- Owner: when applied to any animal, means any person having a property interest in such animal. See Kentucky Statutes 446.010
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- State: when applied to a part of the United States, includes territories, outlying possessions, and the District of Columbia. See Kentucky Statutes 446.010
- Taxpayer: means any person made liable by law to file a return or pay a tax. See Kentucky Statutes 132.010
- Year: means calendar year. See Kentucky Statutes 446.010
1. “Premises” means a bonded warehouse containing distilled spirits:
a. The costs of which are financed by one (1) or more series of industrial bonds under KRS Chapter 103 issued prior to January 1,
2024; and
b. Any portion of the costs of which remains financed by those bonds during any portion of the calendar year; and
2. “Taxpayer” means the owner, proprietor, or custodian of one (1) or more premises.
(b) Notwithstanding subsection (3) of this section, the state and local tax rate that may be levied on distilled spirits for a taxpayer of a premises shall be the state and local tax rate for tax assessments made on January 1, 2023.
(c) Distilled spirits stored or aging in barrels located in a bonded warehouse or premises shall be exempt from state and local ad valorem taxes for tax assessments made on or after January 1, 2043.
(3) The maximum state and local tax rate that may be levied on distilled spirits stored or aging in barrels located in a bonded warehouse or premises shall be as follows:
(a) Ninety-six percent (96%) of the otherwise applicable tax rate for tax assessments made on January 1, 2026;
(b) Ninety-two percent (92%) of the otherwise applicable tax rate for tax assessments made on January 1, 2027;
(c) Eighty-eight percent (88%) of the otherwise applicable tax rate for tax assessments made on January 1, 2028;
(d) Eighty-four percent (84%) of the otherwise applicable tax rate for tax assessments made on January 1, 2029;
(e) Eighty percent (80%) of the otherwise applicable tax rate for tax assessments made on January 1, 2030;
(f) Seventy-six percent (76%) of the otherwise applicable tax rate for tax assessments made on January 1, 2031;
(g) Seventy-two percent (72%) of the otherwise applicable tax rate for tax assessments made on January 1, 2032;
(h) Sixty-eight percent (68%) of the otherwise applicable tax rate for tax assessments made on January 1, 2033;
(i) Sixty-one percent (61%) of the otherwise applicable tax rate for tax assessments made on January 1, 2034;
(j) Fifty-four percent (54%) of the otherwise applicable tax rate for tax assessments made on January 1, 2035;
(k) Forty-four percent (44%) of the otherwise applicable tax rate for tax assessments made on January 1, 2036;
(l) Thirty-eight percent (38%) of the otherwise applicable tax rate for tax assessments made on January 1, 2037;
(m) Thirty-two percent (32%) of the otherwise applicable tax rate for tax assessments made on January 1, 2038;
(n) Twenty-four percent (24%) of the otherwise applicable tax rate for tax assessments made on January 1, 2039;
(o) Twenty percent (20%) of the otherwise applicable tax rate for tax assessments made on January 1, 2040;
(p) Fifteen percent (15%) of the otherwise applicable tax rate for tax assessments made on January 1, 2041; and
(q) Eight percent (8%) of the otherwise applicable tax rate for tax assessments made on January 1, 2042.
(4) Distilled spirits stored or aging in barrels located in a bonded warehouse or premises shall be exempt from state and local ad valorem taxes for tax assessments made on or after January 1, 2043.
(5) If any owner, proprietor, or custodian of a bonded warehouse or premises fails to make the report required by KRS § 132.130, the department shall ascertain the necessary facts required to be reported. For that purpose the department shall have access to the records of the owner, proprietor, or custodian; and the assessment shall be made and taxes collected thereon, with interest and penalties, as though regularly reported.
(6) The assessment made under (1) of this section shall be reviewed according to KRS
131.110.
Effective: March 31, 2023
History: Amended 2023 Ky. Acts ch. 148, sec. 1, effective March 31, 2023. — Amended 2005 Ky. Acts ch. 85, sec. 179, effective June 20, 2005. — Repealed and reenacted 1990 Ky. Acts ch. 476, Pt.V, sec. 317, effective July 13, 1990. — Amended
1966 Ky. Acts ch. 254, sec. 2. — Amended 1964 Ky. Acts ch. 141, sec. 33. — Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 4106, 4107, 4113.
Legislative Research Commission Note (3/31/2023). 2023 Ky. Acts ch. 148, sec. 12, reads as follows: “Any settlement agreement between the Department of Revenue and any taxpayer having distilled spirits in a bonding warehouse, which is related to the ongoing assessment or collection of tax under Section 1 of this Act [this statute], shall not be considered null and void based upon the statutory changes in this Act but may be renegotiated by the parties to the settlement agreement and the renegotiated agreement shall be promulgated in an administrative regulation following the renegotiation process.”