April 30, 2026
Ms. Salinas (for herself and Mr. Smith of Nebraska) introduced the following bill; which was referred to the Committee on Ways and Means
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.
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.