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The bill is also backed by Congressman Brian Fitzpatrick (R-PA-1)
Washington, D.C. – Congressman Lloyd Smucker (R-PA-11) has cosponsored a piece of tax legislation that would ease restrictions for 21 kombucha producers in Pennsylvania and more than 600 across the US. The KOMBUCHA Act (H.R. 2124/S. 892) would amend the Internal Revenue Code to increase the taxable alcohol-by-volume (ABV) threshold for kombucha from 0.5% to 1.25%, protecting raw kombucha from being miscategorized as beer.
Kombucha, sometimes called “tea cider”, is a sweet and tangy fermented tea that has garnered a cult following since it hit shelves in 1995. Its fermentation produces a trace amount of alcohol to protect the live cultures from pathogens. This level is difficult to precisely control, as living cultures can change slightly if exposed to temperature fluctuations. If left on loading docks or on open grocery store shelves, raw kombucha faces the risk of exceeding the .5% ABV threshold and becoming subject to taxes intended for beer.
This has forced small businesses to develop costly techniques, limit delivery areas, and shorten shelf life to comply with the enforced limit, which they say is unreasonably low– the limit was first introduced during Prohibition and is significantly lower than globally accepted levels of trace alcohol (1-2% throughout Mexico, Canada, Australia and much of Europe).
Rep. Smucker joins fellow Pennsylvania Congressman Brian Fitzpatrick (R-PA-1) in cosponsoring the KOMBUCHA Act, which would impact over 350 jobs in the state. The bill, introduced by Rep. Earl Blumenauer (D-OR-3) and Sen. Ron Wyden (D-OR), has received bipartisan support and no opposition but struggles to find a vehicle for passage. It follows a trend of tax updates in recent years designed to relieve excessive tax burdens on craft beverage producers, including the CIDER Act and the Craft Beverage Modernization and Tax Reform Act.
Kombucha Brewers International, the leading trade association for kombucha producers, is circulating a petition for customers of these local kombucha breweries to urge their lawmakers to sign on in support of the bill. The petition, which has collected thousands of signatures, can be viewed here.
About Kombucha Brewers International: Kombucha Brewers International (KBI) is a non-profit trade association (501 c 6) that represents the commercial Kombucha Tea bottled beverage category globally. KBI strives to promote, protect and enhance the overall well-being of the industry by creating an open line of communication between brewers, consumers and regulators while advancing our industry through advocacy, education, research, and modern legislation.
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