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The text of the bill below is as of Mar 23, 2021 (Introduced).

Summary of this bill

Should this bill be given a “Cheers!” or poured down the drain?


Kombucha, a fermented nonalcoholic black tea or green tea drink, is growing in popularity. From July 2019 to July 2020, sales of refrigerated kombucha and other fermented beverages increased 2.4 percent to $703.2 million.

Under current law, a beverage is taxed and regulated as “alcoholic” if it contains more than 0.5 percent alcohol by volume. Kombucha generally falls under this threshold, but can keep fermenting after it’s bottled as the yeasts continue to eat sugars. As a result, it can sometimes come just above that 0.5 percent threshold by the time it reaches store shelves, subjecting …



1st Session

S. 892


March 23, 2021

introduced the following bill; which was read twice and referred to the Committee on Finance


To amend the Internal Revenue Code of 1986 to ensure that kombucha is exempt from any excise taxes and regulations imposed on alcoholic beverages.


Short title

This Act may be cited as the Keeping Our Manufacturers from Being Unfairly taxed while Championing Health Act or KOMBUCHA.


Tax-free production of kombucha


Exception from definition of brewer

Subsection (d) of section 5052 of the Internal Revenue Code of 1986 is amended to read as follows:




In general

For purposes of this chapter, the term brewer means any person who brews beer or produces beer for sale.



The term brewer shall not include any person who—


produces only beer exempt from tax under subsection (e) of section 5053, or


produces only kombucha exempt from tax under subsection (i) of such section.



Exemption from tax

Section 5053 of the Internal Revenue Code of 1986 is amended—


by redesignating subsection (i) as subsection (j), and


by inserting after subsection (h) the following new subsection:


Production of kombucha


In general

Subject to regulation prescribed by the Secretary, any person may, without payment of tax, produce kombucha for consumption or sale.



For purposes of this chapter, the term kombucha means a beverage which—


is fermented solely by a symbiotic culture of bacteria and yeast,


contains not more than 1.25 percent of alcohol by volume,


is sold or offered for sale as kombucha, and


is derived from—


sugar, malt or malt substitute, tea, or coffee, and


not more than 20 percent other wholesome ingredients.



Effective date

The amendments made by this section shall apply to calendar quarters beginning after the date of enactment of this Act.