Metro Council rejects another attempt to revise barrel tax issue

They are built from scratch from American white oak then individually charred 20-25 seconds to give Jack Daniel’s Tennessee whiskey its distinct color and flavor. Ask any distiller and they’ll tell you, the barrel is a key ingredient in the Lynchburg whiskey-making process. And that barrel was once again the subject at a recent Metro Council meeting.

On Monday, council member Wayne Hawkins asked to be added to the agenda to seek approval for Moore County to initiate legal remedies against the State of Tennessee for the second time in less than six months. The issue? The language of what the local property assessor believe is 80 plus years of unpaid, whiskey barrel tax by Jack Daniel’s Distillery.

But first a little backstory

To understand the events of Monday night, you must first understand it’s genesis. All Metro offices are audited annually through the State Comptroller’s office at no cost to the county. It also pays third party auditors to conduct individual property tax audits … either randomly chosen or picked by the local assessor’s office.

From talking to multiple sources, the barrel tax issue all started with a third party auditor in 2017. That individual was the first to suggest that barrels were subject to property tax. Initially one individual within the State Comptroller’s office agreed by e-mail that the barrels were taxable, but even in that e-mail, the person said he had very limited knowledge of the whiskey and barrel manufacturing process.

Then, the state auditor’s office even went so far as to estimate that Jack Daniel owed Metro Moore $2.7 million in revenue from fiscal year 2017-18 that was “due but not yet collected” and buoyed by the exact number, the local office mailed Jack Daniel’s Distillery a bill … something they’ve done every year since.

Then in 2018, as the State Legislature considered the law that clarified that the barrels are exempt, the Comptroller’s office learned more about those facts and, ultimately, more senior members of the Comptroller’s office withdrew their support of the original auditor and Metro Assessor’s position.

A few weeks later, the Tennessee Legislature overwhelmingly approved a bill with some telling language. It allowed, “Tennessee whiskey barrels to remain exempt from property tax.” HB 2038 passed in the House of Representatives by a 78-12 margin and it’s companion bill SB 2076 passed unanimously in the Senate before heading to Governor Bill Haslam’s desk.

Hawkins makes detailed presentation

Hawkins made several assertion in his Power Point presentation:

Assertion #1: “Up until the early months of Lamar Alexander’s first term, Brown-Forman paid taxes on the barrels they purchased.”

Not true, said Metro Mayor Bonnie Lewis during open discussion.

“Never, ever has Jack Daniel’s paid a barrel tax to Moore County … ever,” she stated emphatically. “The 2018 law was nothing more than a clarification.”

It’s a fact confirmed by the Tennessee Distillers Guild who in 2018 told The Tennessean they polled the group’s membership and none have ever been accessed property tax on whiskey barrels. The Guild represents over 30 distilleries from Memphis to Knoxville and all points along the way including Jack Daniel’s Distillery in Lynchburg, George Dickel Distillery in Tullahoma, Prichard’s Distillery in Kelso, Short Mountain Distillery in Woodbury, Southern Pride Distillery in Fayettevile, and the Nearest Green Distillery in Shelbyville.

Assertion #2: “In concert with Brown-Forman’s management, the Alexander administration reclassified the barrels as manufacturing process equipment (or property), which is not subject to sales tax.

This is where the presentation gets a little muddy. Property tax and sales tax are two different things. The law Hawkins asked his fellow council members to sue the state over references barrels as the subject of property tax not sales tax.

Furthermore, Mayor Lewis confirmed with Jack Daniel’s Distillery that it does not pay sales tax on the barrels because it acquires or uses them under a “sale for resale” certificate, which is what any manufacturer uses when buying a component part of a product it manufactures and resells.

In a written statement to Mayor Lewis, the distillery stated, “In other words, for sales tax purposes, Jack Daniels treats the barrels and their parts as materials that will be manufactured into a final product sold to customer, which is consistent with the fact that the barrels are not subject to property tax because they are manufactured items.”

The exact language of the bill then State Representative David Alexander sponsored (HB 2038) is, “As enacted, specifies that aged whiskey barrels, during the time in which such barrels are owned or leased by a person that produces or manufactures whiskey in those barrels, are considered, and have always been considered, “articles manufactured from the produce of this state, or any other state of the union, in the hands of the manufacturer”, for purposes of exemption from property taxation.

“It’s an industry killer.”

Hawkins based his request, in part, on a 2017 Moore County audit that assumed “all equipment used in the manufacturing process has always been considered as property subject to property taxes in both Tennessee and Kentucky.”

In a 2014 interview with Whiskycast, Kentucky Distillers Association President Eric Gregory stated that, “Kentucky is the only place in the world that actually taxes barrels of aging spirit.”

And even Kentucky changed it’s mind. In April 2014, Kentucky Governor Steve Beshear rescinded its “barrel tax” calling it an “industry killer.”

It’s an opinion Metro Mayor Bonnie Lewis shares.

During Monday night’s meeting she told the council, “If you want to see to the impact of Jack Daniel in little Lynchburg come sit with me all day, every day since March,” she told the council. “It’s a ghost town. The people who have been allowed to open their businesses … it doesn’t matter. Because until Jack Daniel reopens, we’re Mulberry or Petersburg.”

{Editor’s Note: In March, Brown-Forman decided to suspend tours at the Lynchburg distillery in response to COVID-19. It remains shuttered today. Click here for that article.}

She also reminded the council that the “barrel tax” question was added to the ballot in 2012 and Moore County voters did not approve it. She also asserted that the 2012 barrel tax effort played a part in Brown-Forman shifting part of it’s barrel construction into Lincoln County.

“Drive south on Highway 55 and go into Fayetteville 37334, there’s where all your barrels are going. Those warehouses are built daily.”

She continued that moving forward with never-ending efforts to tax Jack Daniel barrels as property would make Fayetteville Mayor Bill Newman and Lincoln County taxpayers “very happy.”

In the end, the majority of council members agreed: John Taylor, Sunny Rae Moorehead, Meghan Bailey, Keith Moses, Houston Lindsay, Amy Cashion, Denning Harder, Arvis Bobo, and Gerald Burnett voted against approving money to pursue the barrel tax issue. Wayne Hawkins, Tommy Brown, and Gordan Millsaps voted in favor. David Boyce and Sandy Thomas were not present at the meeting. Attending remotely, Patrick Maynard lost connection prior to the vote. It failed 9-3.

When we reached out for comment, both of Moore County’s state legislators agreed with the council’s final decision.

“I would not support any any action to impose a barrel tax on our distillers,” Representative Iris Rudder told The Times. “You have to remember that any such tax wouldn’t just affect Jack Daniel. There would be lots of smaller distillers affected as well.”

State Senator Shane Reeves agreed.

“Jack Daniel’s has been making its world-famous whiskey since 1866 in Lynchburg,” he said. “That 150-year partnership, which has brought a lot of jobs, tourism, and revenue into this county, has only been possible because of the intentional effort by Moore County to have a low-tax, pro-business climate. Let’s not break something that has been working for over 15 decades.”

In a bit of serendipity, Jack Daniel mailed its annual Distillery Report to Moore County homes this week. In it, the Distillery reports that it accounts for one-half of all local taxes collected in Metro Moore County. Additionally, Visitors Center bottle sales contributed another $333,000 to Metro’s debt fund. They also employ over 700 Moore County residents, which is equivalent to 50 percent of all private sector jobs.

In addition, the reports states, that Jack Daniel’s “substantial payroll and vendor purchases ripple throughout the region” to the tune of $100 million in employee compensation and another $182 million in compensation throughout the state.

They also make hundreds of charitable donation to groups as close as the Whiskey Runners Car Club and Lynchburg Youth Baseball and national groups like the Alzheimer’s Association and the American Cancer Society. •

{The Lynchburg Times is the only independently owned and operated newspaper in Lynchburg. We cover Metro Moore County government, Jack Daniel’s Distillery, Nearest Green Distillery, Tims Ford State Park, Motlow State Community College, Moore County High School, Moore County Middle School, Lynchburg Elementary, Raider Sports, plus regional and state news.}

Metro Council meets tonight … virtually

LYNCHBURG — The Metro Council will meet tonight at 6:30 p.m. In order to follow social distancing recommendations, 10 people (including council members, the mayor, department heads, and the media) will meet at the American Legion Building. Other council members and the public will attend remotely. For credential to login into the meeting, contact the Metro Mayor’s office at 931-759-7076.

Monday night’s agenda is packed. In new business, the council will consider language clarifying language for several Metro ordinances. They will also hear a resolution to adopt personnel policies and to apply for a litter grant. Additionally, they will consider a resolution to allow the Metro Water Department to lease or purchase new water meters.

On budget news, the council will consider the final budget for the 2020-21 fiscal year and consider a recommendation from the Budget Committee to dissolve the Urban Services Fund into the General Fund. The Metro Council will also consider a spending plan for the Governor’s Local Government Support Grant.

Metro Council member Wayne Hawkins has asked to speak to the council at large about two items HB 2038/SB 2076 and a Car Club Event Resolution. As you’ll recall, during the March 16 meeting, Hawkins appeared before the Metro Council on behalf of the Whiskey Runners Car Club, the organization behind Lynchurg’s fall car show, Cruisin’ in the Hollow. The organizers were concerned that their event, which traditionally happens on the first weekend in October, would conflict with the Lynchburg Music Fest’s new date, October 2-3. However, after The Times spoke with LMF organizers, we confirmed that there was no conflict because the music festival would be held at a different location this year. Click here for that article. •

{The Lynchburg Times is an independently owned and operated newspaper that publishes new stories every morning. Covering Metro Moore County government, Jack Daniel’s Distillery, Nearest Green Distillery, Tims Ford State Park, Motlow State Community College, Moore County High School, Moore County Middle School, Lynchburg Elementary, Raider Sports, plus regional and state news.}

School Board meets Monday … virtually

LYNCHBURG — The Moore County School Board will resume business on Monday night but not as usual. April’s regular session meeting will be held online. To listen, click here.

On the agenda for the April 27 meeting, the Board will review policies based on TSBA recommendations, as well as vote on as Board resolution to suspend some policies due to COVID-19.

Director Moorehead will present a request from the annual Bike to Jack and Back fund-raising ride to benefit the National Multiple Sclerosis Society. The group requested the use of the LES campus for camping during their October 17-18 event. October’s set to be a busy month for Lynchburg. The second annual Lynchburg Music Fest will take place at a yet undisclosed location on Oct. 2-3 and the Jack Daniel World Championship Invitational BBQ will take place in Wiseman Park on a new date this year, Oct. 10. The Oak Barrel Half Marathon – which normally takes place in April – will happen on October 24.

Director Moorehead will present a letter of resignation from varsity boys head basketball coach Heath Hardin. He will also discuss with the Board how refunds for this year’s senior trip – which was cancelled due to COVID-19 concerns – will be allocated. Varsity cheer sponsor Erin Rutledge will also request permission for the 2020-21 squad to attend cheer camp at Tennessee Tech University.

Driector Moorehead will give a report on the construction progress at MCHS, graduation plans, prom, and the LES Gym floor replacement.

To view a full agenda, click here. The online meeting is available to the public beginning at 6 p.m. For more information, visit the Moore County Schools website. •

{The Lynchburg Times is an independently owned and operated newspaper that publishes new stories every morning. Covering Metro Moore County government, Jack Daniel’s Distillery, Nearest Green Distillery, Tims Ford State Park, Motlow State Community College, Moore County High School, Moore County Middle School, Lynchburg Elementary, Raider Sports, plus regional and state news.}

Metro Council meets as planned on March 16

LOCAL NEWS — The Metro Moore County Council will meet in a regular session meeting on Monday, March 16 at 6:30 p.m. There will be a Metro Budget Committee meeting at 5 p.m.

In new business, the Council will be presented with the resignation of a fourth district council member, Shawn Adams. Adams previously decided not to run for re-election, according to Mayor Lewis. Mayor Lewis also confirmed that four individuals have stated their intention to run for that office in August.

Duck River Electric Membership Corporation (DREMC) Electrical Engineer Chad Pinion will also address the council. Sheriff Hatfield’s asked to speak to the Metro Council about jail repairs. Wayne Hawkins has also asked to address the council concerning the Jack Daniel Barrel Tax, the Lynchburg Music Fest, and a car show in the park.

Metro EMA Director Jason Deal will present Moore County’s Coronavirus Plan to the Metro Council on Monday night. The Mach Tenn Running Club has also asked to be added to the agenda to seek approval for the new October date for the Oak Barrel Half Marathon. That event was originally slated for April 4.

All Metro County meetings are open to the general public and take place at the American Legion Building beginning at 6:30 p.m. •

{The Lynchburg Times is the only independently owned and operated newspaper in Moore County … covering Metro Moore County government, Jack Daniel’s Distillery, Nearest Green Distillery, the Lynchburg Music Fest, Tims Ford State Park, Motlow State Community College, Moore County High School, Moore County Middle School, Lynchburg Elementary, Raider Sports, plus regional and state news.}

Metro Utilities Board meets March 10

LOCAL NEWS — The Metro Utilities Board will meet in a regular session meeting on Tuesday, March 10 at 6 p.m. Meetings take place at the Metro Utilities Department (MUD) Building located at 705 Fayetteville Highway.

There are two new items to be discussed: 1) a system-wide meter replacement program, and 2) the rehabilitation of the wastewater treatment plant head works. Both items will require financing and thus will be presented for approval to the Metro Council at a later date.

For more information, contact the Metro Utility Department offices at 931-759-4297 or learn more at their website by clicking here. •

{The Lynchburg Times is an independently owned and operated newspaper that publishes new stories every morning. Covering Metro Moore County government, Jack Daniel’s Distillery, Nearest Green Distillery, Tims Ford State Park, Motlow State Community College, Moore County High School, Moore County Middle School, Lynchburg Elementary, Raider Sports, plus regional and state news.}

Metro Council meets Feb. 17

LOCAL NEWS — The Metro Council will meet on Monday, February 17 at 6:30 p.m. in a regular session meeting. There will be a public hearing at 6:20 p.m. to consider the rezoning of the Eakins property in the second district from agricultural to industrial.

In new business the Highway Department will submit the 2020 Roads Improvements List. Metro Public Safety Director Jason Deal will also give an Emergency Management Agency report.

Mayor Bonnie Lewis will also make public announcements about the Moore County Health Department and announce that Moore COunty will receive a Tennessee Department of Transportation (TDOT) Traffic Signal Modernization Program Grant.

All Metro County meetings are open to the general public and take place at the American Legion Building beginning at 6:30 p.m. •

{The Lynchburg Times is an independently owned and operated newspaper that publishes new stories every morning. Covering Metro Moore County government, Jack Daniel’s Distillery, Nearest Green Distillery, Tims Ford State Park, Motlow State Community College, Moore County High School, Moore County Middle School, Lynchburg Elementary, Raider Sports, plus regional and state news.}

Metro Utilities launches new website

LOCAL NEWS — Wanna learn how to read your meter, view the most recent Water Quality Report, or see the agenda for an upcoming Metro Utility Department (MUD) meeting? The new MUD website’s got you covered.

Launched in November, the site offers customer service options, online forms and reports, and information about public meetings. It also allows you to subscribe to email updates about current projects or get text alerts in case of a utility-related emergency. They also offer conservation tips to help locals enjoy lower water bills. To check out the new site, click here. •

{The Lynchburg Times is an independently owned and operated newspaper that publishes new stories every morning. Covering Metro Moore County government, Jack Daniel’s Distillery, Nearest Green Distillery, Tims Ford State Park, Motlow State Community College, Moore County High School, Moore County Middle School, Lynchburg Elementary, Raider Sports, plus regional and state news.}

General Assembly considers legalizing, decriminalizing recreational marijuana

STATE NEWS — On Friday, State Sentor Raumesh Akbari (D-Memphis) introduced a bill (SB 1849) that would legalize recreational marijuana in Tennessee. If approved, the legislation would create a 12 percent tax on the sale of regulated weed up to half an ounce. According to the bill, 20 percent of that money would go to the General Fund, 30 percent would fund state infrastructure, and the remaining 50 percent would go toward public education. To read that bill, click here.

Under the bill, sellers would need a registered business and a license from the state to legally sell weed. Additionally the bill would apply to the growing, processing, manufacturing, delivery and sale of marijuana. Those licensed would also be able to sell only at locations zoned for sale.

A corresponding House Bill (HB 1610) sponsored by Representative Rick Staples (D-Knoxville) would allow each county governments to hold a referendum vote to decide whether the legal marijuana industry is right for their county. That bill would also decriminalize small amounts of marijuana possession statewide. To read that bill, click here.

Proponents of the bills say they could reduce Tennessee’s opioid epidemic, create jobs, free up law enforcement resources, and add billions to state coffers. Opponents claim legalization will lead to increased teen use, more pot-related traffic accidents, and harm the environment.

According to state figures, more that 2,600 farmers are already licensed to grow hemp in Tennessee. It’s similar to marijuana but does not contain THC, the chemical that causes individuals to feel high. Hemp can be used to make cloth, rope, construction materials, and produce cannabidiol or CBD.

If approved, the new proposed bills would be scheduled to go into affect on July 1, 2020. To let your representative know how you feel, contact Representative Iris Rudder at 615-741-8695 or Senator Shane Reeves at 615-741-1066. •

{The Lynchburg Times is an independently owned and operated newspaper that publishes new stories every morning. Covering Metro Moore County government, Jack Daniel’s Distillery, Nearest Green Distillery, Tims Ford State Park, Motlow State Community College, Moore County High School, Moore County Middle School, Lynchburg Elementary, Raider Sports, plus regional and state news.}

Council member asks for legal “blank check” to revisit barrel tax issue

In November 2011, the Metro Council decided by a 10-5 vote. Back then, the Lynchburg Chamber of Commerce unanimously opposed the proposal. In April 2018, the General Assembly decided by a 78-12 vote. But on Monday night, Metro Council member Tommy Brown asked his fellow council members to a approve a legal “blank check” to get clarification on the “constitutionality” of the Moore County Barrel Tax issue.

Brown asked Chairman Denning Harder to add the item into old business just before the January meeting. As such, no information about the issue could be added to the informational packets that each member receives prior to each meeting.

Brown asked for a motion empowering Property Tax Assessor Darrin Harrison to pursue a “administrative or judicial review” of the 2018 decision … using public funds to do so. Brown said he was asking the Council to revisit the long-decided issue due to a new opinion by Murfreesboro Administrative Judge Mark Aaron in September 2019.

“I think we owe it to the the people of this county,” Brown stated.

The Lynchburg Times acquired a copy of that legal opinion. In it, Judge Aaron states that “the administrative judge is earnestly unable to see the assessor’s argument as anything short of a claim that the recent amendment is facially invalid due to constitutional infirmity” … meaning he declines to make a ruling on the constitutional questions surrounding the state legislature’s approved whiskey barrel tax exemption. He further state that he’s “highly skeptical of his authority to usurp the Legislature’s clear directive.”

In Brown’s motion to the Council, he asked that they green light public funds to pursue an administrative or judicial review of the case. He received considerable push back. Mayor Bonnie Lewis cautioned that a legal “blank check” could result in a large, unintended line item.

“I can’t see it costing much,” Brown retorted.

Fellow Metro Council member Amy Cashion stated her unwillingness to vote on Brown’s motion out of the blue. “All of this was decided a long time ago,” she stated. “I’d need to refresh my memory before I felt comfortable voting.”

It’s a sentiment several other members also addressed. Several asked Brown to table his motion until the February meeting to give members time to review the facts … an idea Brown rebuffed.

“It was decided in September,” he replied. “You’ve had time.”

Instead he asked for a roll call vote in the matter. Yes votes were Adams, Millsaps, Brown, and Hawkins. No votes were Moses, Lewis, Burnett, Boyce, Harder, Cashion, Lindsay, Bailey, Moorehead, and Taylor. The motion failed 4-10. Arvis Bobo did not attend the meeting.

Judge Aaron’s appeal ruling took place on September 13, 2019. According to the document, interested parties had 75 days to file any further appeals. That deadline expired in late November.•

{The Lynchburg Times is an independently owned and operated newspaper that publishes new stories every morning. Covering Metro Moore County government, Jack Daniel’s Distillery, Nearest Green Distillery, Tims Ford State Park, Motlow State Community College, Moore County High School, Moore County Middle School, Lynchburg Elementary, Raider Sports, plus regional and state news.}

Metro Council meets on Monday

LOCAL NEWS — The Metro Moore County Council will meet on Monday, January 20 at 6:30 p.m. at the American Legion Building. There will be a Public Zoning Hearing regarding the Davis Property at 6:20 p.m.

The public hearing will address the rezoning of 1.74 acres of land in Moore County’s District 2. The requested rezoning would allow the owner to change the current zoning from agricultural to residential. The Metro Planning Commission recommended this rezoning on Dec. 17. Any interested parties should attend the public hearing.

In new business, the Council will be presented with a rezoning request from Donald Eakins in the Second District. He’d like his property rezoned from agricultural to residential. If approved, this would be the first reading. The measure would then need a public hearing and two more readings before it receives final approval.

The council will also discuss a $3 million bond to complete renovations at Moore County High School. This bond was originally approved in the fall of 2018, according to Mayor Lewis. In similar business, Director of Schools Chad Moorehead will present his final budget amendments for 2019-2020.

According to Director Moorehead during the Jan. 13 Metro School Board meeting, only minor changes will be made. The school system added a $19,000 school safety grant to the budget. That money will be allocated to School Resource Officer (SRO) line item as well as fund upgrades for the visitor check in system at both schools. That new system will scan visitor driver’s license and instantly run background checks.

Metro Schools will also add $8,000 in insurance recovery money to the budget. This covered a lawn mower that was stolen from this school system last year. The cost to replace that mower was $15,000, according to Director Moorehead.

All Metro Council meeting are open to the general public. The American Legion Building is located at 119 Booneville Highway. •

{The Lynchburg Times is an independently owned and operated newspaper that publishes new stories every morning. Covering Metro Moore County government, Jack Daniel’s Distillery, Nearest Green Distillery, Tims Ford State Park, Motlow State Community College, Moore County High School, Moore County Middle School, Lynchburg Elementary, Raider Sports, plus regional and state news.}