KOMBUCHA Tax Exemption Act

Summary#

This bill would change the Internal Revenue Code so that certain kombucha is not treated as an alcoholic beverage for federal excise tax and related rules. It says "low alcohol by volume kombucha" is not subject to tax as wine or beer and not subject to the rules in subchapter F (wine) or subchapter G (beer). The bill defines low alcohol by volume kombucha as a drink that:

  • is fermented only by a symbiotic culture of bacteria and yeast,
  • has not more than 1.25 percent alcohol by volume,
  • is sold or offered for sale as "kombucha," and
  • is made from fermentable sugars (like sugar, malt, honey, or fruit juice) and plant materials (such as tea or coffee). The change would apply to calendar quarters that begin after the law takes effect.

What it means for you#

  • If you make or sell kombucha that meets the bill's definition, the product would not be taxed as wine or beer under the Federal tax code and would not be covered by the listed alcohol regulations.
  • If you buy kombucha, the bill text does not state any direct changes for consumers.

Expenses#

No publicly available information on the bill's impact on federal revenue, costs, or savings is included in the provided text.

Proponents' View#

The bill's title and text say it is intended to keep kombucha manufacturers from being taxed or regulated as alcoholic beverages when their products have low alcohol content. Sponsors present the change as a way to exempt low-alcohol kombucha from excise taxes and the alcohol-specific provisions of the tax code.

Opponents' View#

No publicly available information on opposition or counterarguments is included in the provided text.