Home alcohol delivery has become one of the many new normals for Kentuckians and alcohol producers in recent months. The good news is, it’s here to stay with the enactment of Kentucky House Bill 415, which started out as a temporary deregulatory effort to soften the economic blow on the state’s spirits industry brought on by the Covid-19 pandemic.

Gov. Andy Beshear (D-Kentucky) let HB 415 become law on Wednesday, July 15 without his signature—making Kentucky the latest state to permit distillers, vintners, and brewers in and out of the state to ship alcohol directly to consumers. Under this new law, each adult customer can order up to 10 liters of distilled spirits, 10 cases of wine and 10 cases of malt beverages per month for home delivery.  

“[The new law is now] the model for direct-to-consumer spirits shipping in the country and provides a sound regulatory framework that ensures responsibility, the proper collection of taxes and provides enforcement tools necessary for compliance with all laws,” said Eric Gregory, president of the Kentucky Distillers’ Association.

At the beginning of the year, as the National Conference of State Legislatures pointed out only five states—Hawaii, New Hampshire, Arizona, Florida, and Nebraska— as well as the District of Columbia allowed the direct shipment of spirits. And only eight states permitted the direct shipment of beer and wine: Delaware, North Dakota, Massachusetts, Montana, Ohio, Vermont, Oregon, and Virginia. The remaining states—minus Alabama, Oklahoma and Utah (where the direct shipment of alcohol to consumers is prohibited)—only condone the direct shipment of wine.

Enactment of HB 415 stands to benefit Kentucky distillers and Bluegrass State tourism in general. As highlighted on the Kentucky Distillers Association’s, 2020 Quick Shots: “[bourbon is already an] $8.6 billion signature industry in Kentucky, generating 20,100 jobs with an annual payroll of $1 billion.” The production of spirits and consumption of spirits also drums up a significant amount of state and local tax revenue: $235 million annually. The 2018 tax-assessed value of all bourbon barrels aging in the state is also pretty hefty, weighing in at a whopping $3 billion.

The industry has also become a huge tourist attraction in recent years. As the association’s one pager notes: “In 2018 the Kentucky Bourbon Trail attracted 1 million visits for the first time since it’s creation in 1999, and the Kentucky Bourbon Trail Craft Tour distilleries hosted 340,000 visits – another personal record. That’s a 370% increase in attendance over the last 10 years.”

Although the state’s tourism industry is bound to take a major hit due to Covid-19, allowing distillers to ship alcohol to a consumer’s home is a game changer for the alcohol industry. When tourists are able to embark on the bourbon trail again, they can have distillers ship their bottle of bourbon home—without having to worry about whether or not there is enough room in their bag, properly packing the bottle so that it does not break on their journey, etc.—and continue on their way.

It’s still too soon to tell how much revenue booze home delivery will generate for alcohol producers across the state and the state budget, but given the ever-growing popularity of spirits, odds are this deregulatory action is bound to raise a decent amount of revenue for both entities. As such, Kentucky lawmakers should do taxpayers a solid and tax take hikes off the table.

“Kentucky House Bill 415 is a great example of how lawmakers can raise revenue without raising taxes. I, one, encourage lawmakers across the nation to consider similar reforms in their state, rather than cave to pressure from the Left and hike taxes, and two, encourage Kentucky lawmakers to continue building on this momentum and find more ways to reform government than raise taxes,” said Grover Norquist, president of Americans for Tax Reform.

Although, this de-regulatory action is a major victory for Kentucky alcohol manufacturers, customers, taxpayers, and even state lawmakers, there’s a bit of a holdup in administering the new law. Representative Adam Koenig, R-Erlanger, sponsor of House Bill 415, noted last week that the state still has to craft regulations to oversee the new law—which, unfortunately, may take some time due to Covid-19 restrictions. As such, you may not want to bring out your shot glasses to celebrate just yet.

However, this snag in the timeline is no reason to get bogged down. Kentucky has raised the bar in their treatment towards the alcohol industry and state lawmakers across the nation are beginning to take notice.

Americans for Tax Reform has compiled a list of policy recommendations for governors and lawmakers to consider when they convene for session/special session. Kentucky HB 415 is among one of the many policy recommendations to consider.