December 4, 2023 2:50 a.m.

Last week, Senate Finance Chairman Senator Ron Wyden and Congressman Earl Blumenauer, a senior member of the Ways and Means Committee, reintroduced legislation to stop what they call “unfair and outdated” federal alcohol taxes to kombucha companies in Oregon and across the country.

Wyden said, “Kombucha is not the same as beer or other alcoholic beverages, and it shouldn’t be taxed the same way”. Wyden said, “It’s time to update alcohol tax laws to exempt kombucha from excise taxes. My KOMBUCHA Act would do just that to protect small business and create more jobs in Oregon and nationwide”.

Blumenauer said, “It is outrageous that kombucha is taxed like beer. This is an antiquated legacy of the prohibitionist era and it is past time to end it”. Blumenauer said, “Our legislation will relieve small businesses from these unnecessary tax burdens and support a growing industry in Oregon and across the country”

The release said today, under the Internal Revenue Code, kombucha is subject to excise taxes intended for beverages which have significantly higher alcohol contents, but the reality is consumers do not buy and drink kombucha because of its alcohol content. A person would have to consume between five and ten bottles of kombucha to equal the alcohol in just one beer. Kombucha is a nonintoxicating beverage and has only trace amounts of alcohol.

The KOMBUCHA Act would amend the Internal Revenue Code of 1986 to increase the applicable alcohol-by-volume limit for kombucha from 0.5 percent to 1.25 percent. Kombucha would still have to meet the health and safety requirements generally applicable to nonalcoholic beverages as well as certain beverage alcohol labeling requirements.

The release said the legislative fix would support the fast-growing U.S. kombucha industry. By 2025, the economic impact of the industry is projected to be $5.25 billion. Currently more than 7,500 people work directly in the country’s kombucha industry.

The text of the bill is linked: https://www.finance.senate.gov/imo/media/doc/kombucha_act_text.pdf