Oregon lawmakers propose bill to lift federal tax on kombucha

Washington, DC — U.S. Senator Ron Wyden and U.S. Representatives Earl Blumenauer and Greg Walden reintroduced legislation today which would eliminate federal alcohol taxes and regulations on kombucha companies.

The Keeping our Manufacturers from Being Unfairly Taxed while Championing Health Act or KOMBUCHA, would increase the applicable alcohol-by-volume limit for kombucha from 0.5% to 1.25%. Kombucha – which is a fermented drink made of tea, sugar, bacteria, and yeast – has trace amounts of alcohol that can trigger federal excise taxes and regulations covering alcoholic beverages.

“Kombucha is one the fastest growing beverage industries in the world, with an expected economic impact of $1.2 billion by 2020,” Rep. Earl Blumenauer said in a release Thursday, “This legislation is a common sense solution that would lift unnecessary tax burdens and instead support emerging small businesses in Oregon and across the country.”

Despite having more in common with yogurt than wine or beer, kombucha is subject to a costly federal excise tax as if it were an alcoholic beverage,Rep. Greg Walden wrote, “This bill will help these small businesses keep more of their hard earned money to reinvest in their businesses and create jobs in our communities.”

Senator Ron Wyden added, “Kombucha’s growth in Oregon generates jobs and small business growth throughout our state while creating fans everywhere of this tasty beverage. Modernizing outdated taxes and regulations on kombucha is a must so this industry can continue to build on its achievements.”

The Oregon lawmakers behind the bill say kombucha would still have to meet the health and safety requirements generally applicable to nonalcoholic beverages as well as certain beverage alcohol labeling requirements. You can read the full bill HERE.

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