Danville wants to tax alcohol sales at winery

August 10, 2004|LIZ MAPLES

Danville plans to put a 5 percent tax on alcohol sales at Chateau du Vieux Corbeau and caterers, the same rate now charged to restaurants. The Brousseaus, winery owners, say they don't believe the city can tax wineries, but can only charge an annual fee.

City commissioners had first reading on the new ordinance Monday. The city's current alcohol ordinance only deals with restaurant sales.

The state's Alcohol Beverage Control office said the city can tax alcohol sales as a reimbursement for extra police and administrative costs.

The city doesn't have an estimate on how much alcohol sales have increased its costs. But, the cost of selling alcohol in Danville is a lot more than the city takes in, said Bridgette Milby, assistant city manager.

Milby said the city collected $50,000 from restaurants last fiscal year, but that the city spent a lot more in police enforcement, researching the laws and reviewing applications.


The ordinance, following ABC law, requires the winery and caterers to buy a $1,000 city license, but that amount would count towards its total gross receipts. For example, if 5 percent of the winery's gross sales was $1,001, and it bought a $1,000 license then it would owe the city $1.

The winery at Old Crow Inn received a state malt beverage retail and restaurant wine license in May. It allows the business to sell beer and wine by the drink or by the case.

At a hearing about the license, the state said that the city didn't have authority to govern the winery, and so it issued a state license to the Brousseaus.

Linda Brousseau said that her husband, Andre, had "combed" the alcohol laws, and he believed that the city could charge them an annual fee, but couldn't tax sales.

City Manager Darrell Blenniss said that the city had "done its homework" on the ordinance, and he believes it is legal.

Commissioners had little discussion about the ordinance, except to say that the revision would make the city alcohol ordinance more consistent.

Commissioner Jamey Gay asked residents to ask state legislators to clean up Kentucky's law because it has a number of loopholes and inconsistencies.

Danville denied the winery's licenses in December, saying it didn't have the authority to grant such applications. Danville's liquor-by-the-drink vote only allows the city to grant licenses to restaurants. The Alcoholic Beverage Control board agreed, and granted the license after a review of an appeal filed by the owners, the Brousseaus.

Andre Brousseau has said that he thinks the state alcohol laws are complex and contradictory.

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