Sending Office: Honorable Jared Polis
H.R. 1089 – Keeping Our Manufacturers from Being Unfairly taxed while Championing Health Act (KOMBUCHA)
Kombucha is a fermented tea that has been consumed for over 2,000 years. The kombucha industry is one of the fastest growing beverage categories with a current economic impact of $600 million that is expected growth to $1.8 billion by 2020. Over 5,000 people
in the United States work in the kombucha industry, with hundreds of regional brands that produce and distribute locally.
Under current law, beverages containing 0.5 percent or more of alcohol by volume (ABV) are subject to federal alcohol excise taxes. After the fermentation process, however, it is common for nonalcoholic beverages to contain trace amounts of alcohol.
In the case of kombucha, the fermentation process can lead to trace amounts as high as 1 percent ABV. At these levels kombucha is a non-intoxicating beverage (a person would have to consume, for example, between five and ten bottles of kombucha to get the
alcohol content equivalent to one beer). However, today’s outdated federal tax rules still treat some kombucha as beer, and subject it to the related taxes and tax regulations.
The Keeping Our Manufacturers from Being Unfairly taxed while Championing Health Act (KOMBUCHA) would exempt kombucha from federal alcohol excise taxes by increasing the applicable ABV 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.
This change would bring U.S. laws in line with those of other countries such, as Canada (1.1 percent) and the European Union (1.2 percent). By eliminating the unintended burdens of federal alcohol taxes and regulations on this new industry, the KOMBUCHA
Act is a commonsense solution to support these growing businesses.
With any questions or to become a cosponsor of the KOMBUCHA Act, please contact Tom Clancy at Tom.Clancy@mail.house.gov or 5-2161.
Jared Polis Scott Tipton Earl Blumenauer Greg Walden
Member of Congress Member of Congress Member of Congress Member of Congress
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