Bipartisan members of Oregon's congressional delegation reintroduced legislation Thursday that would eliminate the regulations that tax kombucha like alcohol.
The popular fermented drink is a mixture of tea, water and a symbiotic culture of bacteria and yeast. It has trace amounts of alcohol but is still taxed in the same way as any other alcoholic drink.
The legislation, called the Keeping our Manufacturers from Being Unfairly Taxed while Championing Health Act (or KOMBUCHA), was reintroduced by Oregon Democratic U.S. Sen. Ron Wyden, Democratic Rep. Earl Blumenauer and Republican Rep. Greg Walden.
“Kombucha’s growth in Oregon generates jobs and small business growth throughout our state while creating fans everywhere of this tasty beverage,” Wyden said in a release. “Modernizing outdated taxes and regulations on kombucha is a must so this industry can continue to build on its achievements.”
Wyden originally introduced the bill in 2017, though it never made it to a vote in the Senate.
Fermented beverages containing at least 0.5 percent of alcohol by volume are subject to federal alcohol excise taxes and other regulations.
The bill would increase the alcohol-by-volume limit for kombucha from 0.5 percent to 1.25 percent.
“Kombucha is one the fastest growing beverage industries in the world, with an expected economic impact of $1.2 billion by 2020,” Blumenauer said. "This legislation is a common sense solution that would lift unnecessary tax burdens and instead support emerging small businesses in Oregon and across the country."
Walden echoed the sentiment that the legislation could help small business owners.
"I’ve met with kombucha manufacturers in Oregon who have told me how this outdated tax is holding back their industry," Walden said. "This bill will help these small businesses keep more of their hard earned money to reinvest in their businesses and create jobs in our communities."
