Gardner, Polis, Tipton, Introduce KOMBUCHA Act

Press Release

Today Sen. Cory Gardner (R-Colo.), Rep. Jared Polis (D-Colo.), and Rep. Scott Tipton (R-Colo.) introduced bipartisan, bicameral legislation that would eliminate federal alcohol taxes on kombucha and update regulations for kombucha companies in Colorado and nationwide.

"It's important that our tax code evolve to address its unintended consequences on emerging industries, and its effect on Kombucha manufacturers is an example of why Congress must act to amend it," said Senator Gardner. "This bipartisan legislation is a commonsense fix that will provide regulatory and tax relief to small businesses in Colorado and throughout this country so that they can continue to create good-paying jobs."

"Kombucha is the fastest growing beverage category in the United States," Rep. Jared Polis said. "This bipartisan bill will eliminate unfair taxes for kombucha brewers, many of whom are small businesses. By taking kombucha out from under alcohol in the tax and regulatory code, we can help a new industry grow throughout Colorado and across the country."

"Too often, federal regulations get in the way of small business innovation," Rep. Scott Tipton said. "The challenges that the nation's Kombucha producers have come up against in the federal tax code are a clear example of this. I'm glad to join Congressman Polis and Senator Gardner to put forward this common-sense solution that will help create further economic opportunities for Coloradans."

In the Senate, the Keeping our Manufacturers from Being Unfairly Taxed while Championing Health (KOMBUCHA) Act is co-sponsored by Sens. Cory Gardner (R-Colo.) and Ron Wyden (D-Ore.). Reps. Jared Polis (D-Colo.) and Scott Tipton (R-Colo.) worked together to introduce a companion version in the House.

"We are relieved that this bill will permit us to brew safe and compliant Kombucha here in Colorado while maintaining the correct classification as non-alcoholic," Ed Rothbauer, President of High Country Kombucha said. "We are grateful to all of the original co-sponsors for their support of our growing industry of healthy beverage choices, and specifically to Rep. Polis' for his help dealing with regulators on this issue since 2010."

Kombucha is a fermented tea that has been consumed for over 2,000 years. Trace amounts of up to 1 percent alcohol can occur naturally in the production process, which currently triggers the type of federal excise taxes usually reserved for alcoholic beverages. The KOMBUCHA Act eliminates those unintended tax and regulatory burdens by increasing the applicable alcohol-by-volume limit for kombucha from 0.5 percent to 1.25 percent. Kombucha would still have to meet the health and safety requirements generally applicable to non-alcoholic beverages.

The kombucha industry is one of the fastest growing beverage categories with a current economic impact of $600 million and expected growth to $1.8 billion by 2020. Colorado's kombucha industry is estimated at $20 million in annual sales and provides hundreds jobs across the state.