Bill Summary
This bill, known as the Keeping Our Manufacturers from Being Unfairly taxed while Championing Health Act or "KOMBUCHA," aims to amend the Internal Revenue Code of 1986 to exempt low alcohol by volume kombucha from excise taxes and regulations on alcoholic beverages. This means that producers of low alcohol kombucha, a fermented beverage made from a symbiotic culture of bacteria and yeast, will not be subject to the same taxes and regulations as other alcoholic beverages. The bill also includes a definition for low alcohol by volume kombucha and specifies that it must contain no more than 1.25% alcohol by volume and be derived from certain ingredients. These changes will take effect in the next calendar quarter after the bill is enacted into law.
Possible Impacts
1. The legislation would benefit manufacturers of low alcohol by volume kombucha by exempting them from excise taxes and regulations, allowing them to save money and potentially expand their business.
2. Consumers of low alcohol by volume kombucha may see a decrease in prices as a result of the tax exemption, making the product more affordable and accessible.
3. The legislation could also lead to increased consumption of low alcohol by volume kombucha as it becomes more readily available and affordable, potentially impacting public health and alcohol consumption rates.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 3365 Introduced in Senate (IS)]
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118th CONGRESS
1st Session
S. 3365
To amend the Internal Revenue Code of 1986 to ensure that low alcohol
by volume kombucha is exempt from any excise taxes and any regulations
under chapter 53 of such Code which are imposed on alcoholic beverages.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 30, 2023
Mr. Wyden introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to ensure that low alcohol
by volume kombucha is exempt from any excise taxes and any regulations
under chapter 53 of such Code which are imposed on alcoholic beverages.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Keeping Our Manufacturers from Being
Unfairly taxed while Championing Health Act'' or ``KOMBUCHA''.
SEC. 2. TAX-FREE PRODUCTION OF LOW ALCOHOL BY VOLUME KOMBUCHA.
(a) Exemption From Tax on Wine.--Section 5042(a) of the Internal
Revenue Code of 1986 is amended by adding at the end the following:
``(4) Low alcohol by volume kombucha.--
``(A) In general.--Subject to regulations
prescribed by the Secretary, low alcohol by volume
kombucha shall not be subject to--
``(i) tax as wine, or
``(ii) the provisions of subchapter F.
``(B) Definition.--For purposes of this chapter,
the term `low alcohol by volume kombucha' means a
beverage which--
``(i) is fermented solely by a symbiotic
culture of bacteria and yeast,
``(ii) contains not more than 1.25 percent
of alcohol by volume,
``(iii) is sold or offered for sale as
kombucha, and
``(iv) is derived from--
``(I) fermentable sugars, including
sugar, malt or malt substitute, honey,
and fruit juice, and
``(II) plant materials, including
tea and coffee.''.
(b) Exemption From Tax on Beer.--Section 5053 of the Internal
Revenue Code of 1986 is amended--
(1) by redesignating subsection (i) as subsection (j), and
(2) by inserting after subsection (h) the following new
subsection:
``(i) Production of Low Alcohol by Volume Kombucha.--Subject to
regulations prescribed by the Secretary, low alcohol by volume kombucha
(as defined in section 5042(a)(4)(B)) shall not be subject to--
``(1) tax as beer, or
``(2) the provisions of subchapter G.''.
(c) Effective Date.--The amendments made by this section shall
apply to calendar quarters beginning after the date of enactment of
this Act.
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