Hometown seeks to tap more taxes from Jack Daniel’s

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NASHVILLE, Tenn. For decades, Jack Daniel’s whiskey has celebrated its small Tennessee hometown of Lynchburg with folksy, black-and-white advertisements urging folks to slow down and have a sip.

Now local officials want the maker of the world’s top-selling whiskey to pay a bigger bar tab as they struggle with their budget. How does up to $5 million sound?

A measure approved by the Moore County Council asks the Tennessee legislature to authorize a local referendum on whether the distillery should pay that much in new taxes on the 500,000 barrels it fills with whiskey each year.

The 145-year-old distillery, tucked away on 1,700 hilly acres down the road from Lynchburg’s quaint town square, now pays $1.5 million in local property taxes.

If the barrel tax is approved, it would be a huge help to the local government, whose annual budget is $3 million and would get every last drop, so to speak, of the money.

Distillery officials say they already do their civic and fiscal duties.

“We’re paying our part, our fair share,” said Tom Beam, senior vice president and general manager of production at the facility. He said the distillery has helped the area in several ways, including assisting with renovations at the courthouse and a swimming pool.

“We operate as a partner with the county,” he said.

He worries that such a law would set a terrible precedent for other businesses in the state. “Other counties could try to do the same thing, attacking businesses. It could be a job killer,” he said.

Nevertheless, supporters of the referendum say Jack Daniel’s owes more.

“Lynchburg and the people of Moore County have been involved in the success of the Jack Daniel’s brand; the value of the brand worldwide is due in no small measure because they have marketed our town and people successfully,” said Charles Rogers, who has led the campaign for the new tax.

The town and Jack Daniel’s brand are entwined like few other products. The iconic black-and-white label of Jack’s “Old No. 7” whiskey even lists Lynchburg’s population. The bottle says 361, but the town and county really have about 6,400 people. Ten million cases of the sour mash whiskey, led by Old. No. 7, are sold worldwide every year.

“They owe something back to the county,” said Mr. Rogers, a Lynchburg native and retired executive with the Chrysler Group LLC.

For those with thirsty throats fearing a retail price increase if the proposal passes, corporate officials would not speculate. But Mr. Beam offered this sobering thought: “We’d be out several million dollars a year. We’d have to look to save money.”

The proposal will go to the General Assembly early next year. If authorized there, the referendum in the county could be held as early as next November.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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