KOMBUCHA
- Sponsor
- Rep. Salinas, Andrea [D-OR-6]
- Committees
- Ways and Means Committee (primary)
- Last action
- Apr 30, 2026
Bottom line
The KOMBUCHA Act exempts low-alcohol kombucha from federal alcohol excise taxes and regulations, aiming to support manufacturers and reduce consumer costs.
What it actually does
This bill amends the Internal Revenue Code of 1986 to exempt low alcohol by volume (ABV) kombucha from federal excise taxes and regulations typically applied to wine and beer. It defines low ABV kombucha as a beverage fermented solely by a symbiotic culture of bacteria and yeast, containing not more than 1.25 percent alcohol by volume, sold as kombucha, and derived from fermentable sugars and plant materials like tea or coffee.
Proponents argue
Supporters argue that low ABV kombucha is primarily a health beverage and should not be subject to the same stringent taxation and regulation as traditional alcoholic beverages. They contend that current tax classifications create an unfair burden on kombucha producers, hindering innovation and market growth, and that this bill levels the playing field for a growing industry.
Opponents contend
Critics might argue that any beverage containing alcohol, regardless of its volume, should be subject to some level of excise tax to account for potential public health impacts or to maintain consistent tax policy across all alcohol-containing products. They might also raise concerns about potential loopholes or difficulties in enforcing the 1.25% ABV threshold, leading to revenue loss.
The bill text is very short and clear, making it highly accessible for a quick read and understanding of its provisions.
Section 2(a)
Exemption from Tax on Wine for Low ABV Kombucha
This provision amends Section 5042(a) of the Internal Revenue Code to explicitly state that 'low alcohol by volume kombucha' is not subject to federal excise tax as wine, nor to the regulatory provisions of subchapter F, which govern wine production and sales. It also provides a clear definition for what constitutes 'low alcohol by volume kombucha' for tax purposes, specifying its fermentation method, alcohol content limit, marketing, and source ingredients.
Supporters argue
Supporters argue this exemption corrects an outdated classification, recognizing kombucha's distinct nature as a health-oriented beverage rather than an alcoholic drink. They state it fosters growth in a burgeoning industry and makes a popular product more affordable and accessible.
Critics contend
Critics might contend that any product containing alcohol, even in low amounts, should contribute to excise tax revenue, which often funds public health initiatives. They may also argue that creating specific exemptions complicates the tax code and could lead to demands for similar treatment from other beverage categories.
Tradeoffs
The provision balances the desire to support a specific industry and consumer preference for health beverages against the principle of consistent taxation for alcohol-containing products and potential federal revenue implications.
Section 2(b)
Exemption from Tax on Beer for Low ABV Kombucha
This section mirrors the previous provision by amending Section 5053 of the Internal Revenue Code to ensure that 'low alcohol by volume kombucha' is also exempt from federal excise tax as beer and from the regulatory provisions of subchapter G, which governs beer production and sales. It explicitly references the definition of low ABV kombucha established in Section 2(a).