KOMBUCHA

119th Congress Introduced by Ron Wyden

Low-ABV kombucha meeting criteria would be exempt from wine and beer excise taxes and related rules, clarifying its regulatory treatment.

Introduced in Senate

Bill Summary: S.4457 (119th Congress) – KOMBUCHA

Purpose and intent

S.4457, titled the Keeping Our Manufacturers from Being Unfairly Taxed while Championing Health Act or “KOMBUCHA,” aims to ensure that low alcohol by volume (ABV) kombucha is exempt from excise taxes and regulations imposed on alcoholic beverages. Introduced in the Senate by Senator Wyden on April 30, 2026, the bill seeks to create a tax and regulatory carve-out for certain low-ABV kombucha products.

Key provisions and changes

Tax exemption for low-ABV kombucha (wine tax exemption).
Adds a new category to Section 5042(a) of the Internal Revenue Code:

Low ABV kombucha would not be subject to tax as wine.
It would not be governed by the provisions of subchapter F (which covers alcohol fuel and tobacco tax provisions).
Defines “low alcohol by volume kombucha” as:
Fermented solely by a symbiotic culture of bacteria and yeast (SCOBY);
Containing no more than 1.25% alcohol by volume (ABV);
Sold or offered for sale as kombucha;
Derived from fermentable sugars (including sugar, malt or malt substitutes, honey, and fruit juice) and plant materials (including tea and coffee).

Tax exemption for beer tax provisions.
Amends Section 5053 to add a new subsection (i) that provides:

Low-ABV kombucha (as defined above) shall not be taxed as beer.
Shall not be subject to the provisions of subchapter G (relating to beer excise taxes and administration).

Regulatory alignment.
Both tax exemptions (for wine and beer) are conditioned on regulations prescribed by the Secretary, indicating further regulatory guidance would accompany the exemptions.

Effective date.
The amendments apply to calendar quarters beginning after the date of enactment.

Who or what would be affected

Low-ABV kombucha producers and sellers.
Businesses producing or selling kombucha that meets the defined criteria (≤ 1.25% ABV, SCOBY fermentation, and specific ingredients) would be exempt from wine and beer excise taxes and related regulatory subchapters.

Regulatory framework.
The bill signals that the Internal Revenue Service and Treasury would issue regulations to implement and administer the exemptions.

Procedural and timeline aspects

Introduction and referral.
Introduced in the Senate on April 30, 2026; referred to the Committee on Finance.

Effective timing.
The tax and regulatory exemptions would take effect for calendar quarters starting after enactment.

Potential impact (summary)

Reduces tax burden for qualifying low-ABV kombucha producers by shielding them from wine and beer excise taxes.

Provides a clearer regulatory pathway for labeling and marketing low-ABV kombucha by establishing a defined category.

Could influence product formulation and pricing in the kombucha market, potentially expanding availability of low-ABV options for consumers seeking non-alcoholic or very low-alcohol beverages.