A bipartisan group of Oregon lawmakers want to sweep old-fashioned kombucha taxes off the table.
The cleverly-titled "Keeping our Manufacturers from Being Unfairly Taxed while Championing Health Act" — or KOMBUCHA — is backed by Oregon Sen. Ron Wyden and U.S. Rep. Earl Blumenauer, both Democrats, plus Republican Congressman 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 lip-smacking statement. "Modernizing outdated taxes and regulations on kombucha is a must so this industry can continue to build on its achievements."
The lawmakers says federal tax code treats kombucha like other alcohol-based products — such as beer or liquor — even though most brands of kombucha contain only very small amounts of the yeasty intoxicant.
This bill would prompt the Internal Revenue Service to redefine the term "brewer" so it excludes those churning out kombucha blends containing less than 1.25 percent alcohol by volume. Currently, federal excise taxes and other regulations kick in for any brew with 0.5 percent alcohol.
The legislation introduced Thursday, March 28 on Capitol Hill is a recapitulation of a bill submitted in 2017 that failed to gain traction.
"Despite having more in common with yogurt than wine or beer, kombucha is subject to a costly federal excise tax as if it were an alcoholic beverage," Rep. Walden noted. "I've met with kombucha manufacturers in Oregon who have told me how this outdated tax is holding back their industry."
Rep. Blumenauer added that the legislation is a "common sense solution" for an industry with an expected economic impact of $1.2 billion by 2020. The current economic impact is pegged at $800 million, closely tied to the 5,000 people working in the industry.
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