Tax Increase May Drive Jack Daniel's to Michigan

By:  Kelly Holt
11/21/2011
       
Tax Increase May Drive Jack Daniel's to Michigan

When Jack Daniel founded a whiskey distillery in Lynchburg, Tennessee, in 1875, he could little have guessed that over a century and a quarter later, the company would be so wildly successful or have remained in the same county the entire time. But now, nothing less than taxes might drive it to another state.

Jack Daniel’s is the largest employer in Moore County (pop. 5,740) and accounts for a third of its tax base. According to FoxNews.com Oct. 21, 60 percent of the price of a bottle of the company’s whiskey is some form of tax. The company is also the largest sales-tax generator in the county. As such, Senior VP and General Manager Tommy Beam said the company is contributing its fair share. Yet a private citizen is leading the effort to increase the distiller’s taxes by another $10 per barrel. Charles Rogers claims “We are entitled to more money from the only industry in the county — Jack Daniel’s distillery. They (Jack Daniel’s) created the image of this little old hamlet down here being the place where this fantastic whiskey is being made. And the people didn’t realize what was going on. They were being marketed all over the world as ‘the place.’ ” Rogers says the Daniel’s image comes from the town and that the community is entitled to the money the same way a film company pays “usage fees” for a location.

Beam said, “It’s a job killer because it ups our costs. We’re competing in a global marketplace.” The tax would cost the company an additional $4 million a year, a cost that would undoubtedly be passed on to the consumer. Or, as Beam says, “We have been able to hire 25 or 30 people in the last four or five months. And if our costs go up $4 or $5 million dollars, that’s probably going to make us a little less competitive. So, we might not grow as much.”

When Jack Daniel founded a whiskey distillery in Lynchburg, Tennessee (photo), in 1875, he could little have guessed that over a century and a quarter later, the company would be so wildly successful or have remained in the same county the entire time. But now, nothing less than taxes might drive it to another state.

Jack Daniel’s is the largest employer in Moore County (pop. 5,740) and accounts for a third of its tax base. According to FoxNews.com Oct. 21, 60 percent of the price of a bottle of the company’s whiskey is some form of tax. The company is also the largest sales-tax generator in the county. As such, Senior VP and General Manager Tommy Beam said the company is contributing its fair share. Yet a private citizen is leading the effort to increase the distiller’s taxes by another $10 per barrel. Charles Rogers claims “We are entitled to more money from the only industry in the county — Jack Daniel’s distillery. They (Jack Daniel’s) created the image of this little old hamlet down here being the place where this fantastic whiskey is being made. And the people didn’t realize what was going on. They were being marketed all over the world as ‘the place.’ ” Rogers says the Daniel’s image comes from the town and that the community is entitled to the money the same way a film company pays “usage fees” for a location.

Beam said, “It’s a job killer because it ups our costs. We’re competing in a global marketplace.” The tax would cost the company an additional $4 million a year, a cost that would undoubtedly be passed on to the consumer. Or, as Beam says, “We have been able to hire 25 or 30 people in the last four or five months. And if our costs go up $4 or $5 million dollars, that’s probably going to make us a little less competitive. So, we might not grow as much.”

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