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Once-forbidden moonshine now providing significant tax revenue

Developers are taking notice of tourists' fascination with moonshine. Since lawmakers made the once outlawed brew legal, distilleries have become destinations in East Tennessee, providing plentiful samples, souvenirs, and distillery tours.
People line up for samples at Sugarlands Distillery in Downtown Gatlinburg

Developers are taking notice of tourists' fascination with moonshine. Since lawmakers made the once outlawed brew legal, distilleries have become destinations in East Tennessee, providing plentiful samples, souvenirs, and distillery tours.

But not all of the cash coming in from the attractions directly benefits the business. A significant chunk goes into the tax base.

Since lawmakers made moonshine legal in Tennessee 2010, 17 distilleries have popped up. Six of the distilleries are in East Tennessee, four of those in Sevier County.

"Gatlinburg is kind of the epi-center of moonshine production right now," said Ned Vickers, owner of Sugarlands Distillery in Gatlinburg.

The Sevier County mayor's office said they have received six letters of intent from developers wanting to open more. The planning department said most of them have not done the necessary paperwork, but two have site plans.

"It's unbelievable the response we've gotten," he said, "We have thousands of people come through our distillery every day and we're now in five states."

"People don't have to be afraid of it anymore," said Jessie Blalock, a spokesperson for the Ole Smokey Mountain Distillery in Gatlinburg. "It doesn't stay on the shelf very long."

Ole Smokey Mountain recently opened a second location in Pittman Center because they were "busting at the seams" in the downtown Gatlinburg location.

Moonshine is taxed heavily on the local, state, and federal level.

One hundred proof moonshine liquor is taxed $4.40 per gallon by the state and $13.50 per gallon by the federal government.

For one gallon of 100 proof at Sugarlands, or four one-quart bottles, $22.90 goes to liquor taxes, according to Vickers.

"It's a big part of the purchase price when you buy it at the liquor store or here. The local government gets 8% of the wholesale cost of every bottle of moonshine here," Vickers said.

He added that doesn't include sales tax.

Although the Tennessee Department of Revenue couldn't provide the numbers to show moonshine specific tax revenue, the did says the wholesale alcoholic beverage tax on distilled spirits of $4.40 per gallon have increased $6 million since 2010 when moonshine was legalized.

There's a rich history of moonshine in East Tennessee, the reason Vickers said he located in Sevier County. Part of its appeal, he said, is the fact it was forbidden for decades.

"It has a, 'you're being a little bit bad feel to it,"' said Marc Braden who was visiting Sugarlands from Florida. "It harkens back to a day when you could do something you weren't supposed to do."

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