• Kashrus Awareness Staff

The $300 Million Sales Tax

Updated: Jun 2

Ep 2 Part B


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A Rabbi, a Senator, and a Distiller raise the Bar


Many years ago, we were invited to a large bourbon and spirits factory. They asked us to certify their product for their Israel market.


The problem was interesting, because in Eretz Yisroel, the Rabbanut is very makpid on yoshon. So the question at hand is, was the wheat used to make the vodka, yoshon? I remember we walked through the factory and then we sat down to discuss the matter with them. As I was getting up, I said, “Oh, I forgot to ask one thing, by the way, is this factory Jewish-owned?” He looks at me and says, “Yeah.” I said, “Is it fully Jewish-owned?” And he said, “I can’t tell you that.” And I asked, “Do you know if the chometz was sold?”


He had no idea what I was talking about. He thought we were talking about mevushal because they knew that when they donated to the local Federation, it always had to be mevushal. So he says, “But Rabbi, it was co


oked!” The halacha of chometz she’avar alav haPesach was so foreign to him.


It took six months to research if he was actually Jewish, not just from his father, or ‘culturally Jewish’. He happened to be well-known within the political circles, so we ended up calling a senator who grew up with him. We also had to investigate if it was fully Jewish-owned. Anyway, it was a fascinating halachic question.


So Reb Yitzchok, let me ask you, if you were the owner and I, or any other Rav Hamachshir, knew that this is chometz she’avar alav haPesach which we assume Chazal made to encourage you the owner to not have chometz on pesach. Do I have to announce that to the world? In Brisker terms, is it a din on the gavra or is it on the cheftza?


Now, one of the things AKO has is what we call an AKO Beis Din. It doesn’t convene often, but when it does, boy, is it a serious thing. The poskim of the major agencies come together to solve very complex sh’ailos. We had to gather the Beis Din for this, because since this individual owned so many products this problem was so far-reaching. It would affect Jewish events, simchos, and individual consumption all over. The Beis Din came to the maskanah that yes, chometz she’avar alav haPesach is so serious in the eyes of Chazal and I must raise awareness about this.


So R’ Yitzchok, can you imagine the call I had to make to this factory? “Yeah, I just want to follow up on your request to be kosher, well, not only can you not be kosher, but I’m about to tell the world that the majority of your products may not be used.” Boy, did that not go over well.


But sometimes the Ribono shel Olam shows that when you do the right thing, it works out. I don’t remember how much later it was, but one day the guy called us back and said, “You know what? We were so impressed with your authenticity, it was an incredibly uncomfortable thing for you to do what you did, it could have had legal ramifications too, but you just stuck to the letter of Jewish law.”


And then he tells me “I want to do this right, what can we do to make our product kosher?” I said, “Well, generally when you have a company that’s Jewish-owned, we sell the chometz before Pesach and buy it back after Pesach”.



He looks at me and says, “Well, according to federal law, every time I buy or sell liquor I’m required to pay tax, that’s going to cost me at least $300 Million in taxes every Passover!”


He looks at me and says, “Well, according to federal law, every time I buy or sell liquor I’m required to pay tax, that’s going to cost me at least $300 Million in taxes every Passover!”


Rabbi Hisiger: For real?


Rabbi Fishbane: Yes, since it’s a bona fide sale. I start throwing at him Chasam Sofers, but he cut me off and asked, “Rabbi, is this a real sale or not?” And I tell him “Of course it’s a real sale.”


In the end we came up with a creative solution. He agreed to put away a hundred barrels every year so that a non-Jewish person would own it fully all the way until bottling. They would also mark off the barrels so they wouldn’t be touched, and in 10 years we’d have authentically kosher bourbon!


Rabbi Hisiger: Ingenious. Did he have to pay tax on that?

Rabbi Fishbane: No, it was a different type of sale. But the point I want to bring out with this is his question, which really sheds light on the whole inyan of chometz she’avar alav haPesach.



Most of the sales, when done right, are legitimate. But the issue is that some factories stay open on Pesach and continue to operate as if that contract did nothing to them, that is somewhat of a ha’arama.


The tzibbur wants to stay away from that. They take this very seriously. So part of the research into where you can and cannot shop after Pesach includes investigating the type of mechira that was done.


The bourbon industry has spilled over from being the safest walk-a-straight-line mashkeh to an area fraught with kashrus problems. This is because, inherently, bourbon is an aged drink. Can mashgichim delve into years of shared ownership and aging processes?


Rabbi Hisiger:

In regards to chometz she’avar alav haPesach, why is there more of a concern with bourbon than other whiskeys?


Rabbi Fishbane: Good question. Bourbon is American-made, so it happens to pass through many Jewish hands, whether at the bottling process, the storing, or the distribution, or even behind the scenes. For example, when a bourbon manufacturer runs out of the base alcohol, they might buy it from the Jewish fellow down the block.

It’s much more prevalent than with scotch, which is less of a Jewish-owned industry out in Scotland, or Irish whiskey. So bourbon does have more Jewish involvement.

Let’s contrast that with the typical application we’d receive to certify potato chips. Day One: application received. On that same day, you can watch the potato be removed from the ground, scrubbed, sliced, fried, with bishul Yisroel ensured if you’re machmir. The next day, it’s in a bag and you’re snacking to your heart’s content, creating a mess in your car. Right?


Not so with bourbon. Bourbons are aged. So when you walk into a factory, you need some intel to figure out, okay, what happened here? It’s one of the things that we mashgichim need to have: time machines! You’ve got to recreate the scene. What happened here eight years ago?

It’s quite fascinating. Just a short time ago, in relation to kashrus, bourbon was the safest drink; four ingredients, nothing else.

I have to tell you that it has exploded the industry. We’ve gotten more knowledge, and it’s not so pashut anymore.

Little did I realize that people actually buy barrels and age them in their own basements!

There was a yungerman from Lakewood who purchased several hundred thousand dollars of bourbon from a Jewish-owned company that never sold their chometz. He aged it in his cellar, and boy, what a nisayon to have! Should he pour it all down the drain? Can he give it away? These are real shailos for a rav. It’s not pashut. Are you allowed to give it away? How far does the gezeirah of chometz she’avar alav haPesach go?


Rabbi Hisiger: That’s a straight up tough shot to swallow. Now, one of the things that became very popular on Motzaei Pesach, especially among bnei Torah, is to seek out non-Jewish establishments from where to purchase beer and spirits from.

People don’t want to rely on a mechirah. I’m not looking to stir up controversy. I’m asking a very practical question. What would you advise them to do? Should they go to their local Jewish grocery store, which ostensibly conducted a bona fide mechirah? Or should they purchase from a local ShopRite? Is there a better mehalech?

We’re talking about Motzaei Pesach, or before a couple of days have passed. Where should one buy bourbon? Plus, there’s the mitzvah of v’hechzakta bo to reckon with.


Rabbi Fishbane: If you’ve really done your research and that particular supermarket is b’emes not a Jewish-owned establishment, that is a better choice for those who don’t want to rely on the mechirah.

But on the other hand, if you are mesupak about the ownership of that chain, or if the distribution company might be Jewish-owned, you might as well purchase from a frum ehrliche Yid who did the mechirah k’halacha.

I’m not here to pasken l’halacha. I’m just raising the questions that an educated consumer would wish to be informed about. After all, she’ailas chacham is chatzi teshuvah.


In One Shot:

With Jewish involvement being more prevalent in the bourbon industry, coupled with its aged properties, an educated consumer should inquire before imbibing.


As with all the topics we’re discussing here, the yochid should follow the guidance of their own rav, because indeed there are many who machshir even if the company was jewish owned, specifically when it comes to schnapps.



The Takeaway:


Your to-do list:

  • Don’t extrapolate from year to year.

  • Seek out available lists from major Kashrus agencies that you trust, and follow their guidelines.

  • A note of caution: make sure you obtain the most recent information compiled for this year.


Terms Defined:

Chometz She’avar alav HaPesach is a Gezeira d’rabbanan forbidding chometz that was in the possession of a Jew over Pesach. Since the Onesh for Chometz B’Pesach is Kareis, the rabbanan instituted this as a protective measure, and they were very strict about it.



The Kashrus Awareness Campaign receives guidance from AKO, an umbrella association of kashrus organizations. We do not intend to render halachic decisions, nor do we affiliate with, nor endorse the contents of linked material. The project's mission is to inform and educate the kosher consumer to know what to look out for and what to inquire about., after all, sh’alas chochom is chatzi teshuvah. For all questions you have regarding halachah, please ask you local Rav for guidance.

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