November 30,2023

Wyden, Blumenauer Introduce Legislation to Support U.S. Kombucha Industry

Washington, D.C. – Senate Finance Chairman Ron Wyden, D-Ore., and U.S. Representative Earl Blumenauer, D-Ore., a senior member of the Ways and Means Committee, today reintroduced legislation to put a stop to unfair and outdated federal alcohol taxes on kombucha companies in Oregon and across the country.

“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 businesses and create more jobs in Oregon and nationwide.

“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. Our legislation will relieve small businesses from these unnecessary tax burdens and support a growing industry in Oregon and across the country,” said Blumenauer.

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. In contrast to beer, Kombucha is a nonintoxicating beverage and has only trace amounts of alcohol. Yet because of natural fermentation processes, these trace amounts of alcohol, which are usually less than 0.5 percent, may occasionally increase slightly, especially during transport or handling by third parties.

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 common sense 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 here.