FOR IMMEDIATE RELEASE:
May 7, 2020
Contact: Press@paul.senate.gov, 202-224-4343
WASHINGTON, D.C. – Yesterday, U.S. Senator Rand Paul (R-KY) introduced legislation to allow distillers to make hand sanitizer without having to pay the excise taxes they usually would if their product was for human consumption.
In order to address a national shortage of hand sanitizer, distillers in Kentucky and across the country have stepped up on behalf of their communities by offering to use their unique production capabilities and resources to bring more hand sanitizer to the market during this time of emergency.
“While distillers across Kentucky and the nation have quickly adapted their operations to provide a public service and support our communities and first responders during this emergency, the federal government is still stuck doing business as usual, allowing unelected bureaucrats to call the shots because they think Americans will drink their hand sanitizer,” said Sen. Paul. “Government should be helping, not hindering, our response to this pandemic, and my legislation ensures distillers aren’t punished for supporting the American people.”
Distillers are usually required to pay a federal excise tax on their alcohol, but with so many switching to hand sanitizer production, the financial burden would be exorbitant, especially for some of the larger distillers donating their products to hospitals and first responders. While the recently passed CARES Act did try to address this and has a provision intended to exempt distillers from the tax, the actual language says they are subject to “FDA guidance,” which still poses a problem.
According to FDA guidance, distillers wishing to avoid paying the excise tax must denature the alcohol, which involves adding chemicals to make sure it is not fit for human consumption. This is an onerous task for distillers who are not typically in the hand sanitizer business, as many of these chemicals could damage their equipment, which they eventually intend to return to bourbon production.
You can read Senator Paul’s legislation HERE.