By law for a spirit to be called "Bourbon" in the usa, it must:
1 be made in the USA
2 be at least 51 percent corn
3 be aged at least 4 years in NEW oak barrels
4 must be aged at less than 160 proof and bottled at less than 80 proof.
The reason for the last is that the bourbon actually absorbs sugar and tannin from the oak and is flavored by the wood, as well as gaining color from the charred lining, and concentrating the flavors as the pure ethanol evaporates out through the oak (the angels share) leaving the flavored "impurities" There is a balance point where the sugar is depleted but the tannin's continue to be absorbed, producing a spirit that is too bitter and astringent in flavor. That's why you can buy 30 year old scotch, but not 30 year old bourbon. Most distilleries also sell whisky that is not billed as bourbon, and therefore is not required to be aged in new casks. These lesser spirits are usually sold as "whisky or blended whisky" and may have artificial flavors added to mimic the carmel taste from the scorched sugar in the new oak casks. After being used a second time for non bourbon whisky, casks are often sold for other uses, including possibly storing port or sherry. Many are in fact sold to distillers in the UK and used to age scotch or irish whiskey as well. Scotch is flavored by the smoke from the peat used to dry the malt, more than anything else, so there is no downside to letting it continue to evaporate and condense the flavor longer (other than the continued loss in volume through evaporation).
Jack Daniels (and George Dickel) are legally bourbons, though they do not claim to be. They are Tennessee sipping whiskies made using the Lincoln county process, which is a legal statute laying out the way whisky should be charcoal filtered.
Kentucky is the only state allowed by law to use the state name in conjunction with the Bourbon appellation, which is why there are no Tennessee bourbons or Missouri Bourbons.
