You go, Colorado.
A bipartisan group of lawmakers in Colorado have introduced legislation that would change the tax laws for kombucha, a vinegary fermented beverage popular with health-concious consumers. As trace amounts of alcohol are created in the manufacturing process, the US government effectively classifies the hippie mainstay as an alcoholic product. This means that kombucha brewers are being hit with higher taxes than their soft-drink competitors, ultimately raising the price.
The legislation proposes to eliminate tax and regulatory burdens by changing kombucha’s ABV (alcohol by volume) limit from 0.5% to 1.25%. But the best part? It’s called the “Keeping Our Manufacturers from Being Unfairly Taxed while Championing Health Act”: that’s right, the KOMBUCHA Act.
“This bipartisan bill will eliminate unfair taxes for kombucha brewers, many of whom are small businesses,” Democratic representative Jared Polis said. “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.”
The original legislation they are opposing traces back to 1935, when the Alcohol and Tobacco Tax and Trade Bureau (TTB) deemed a beverage alcoholic if it contained more than 0.5% alcohol. This puts kombucha in the same tax bracket as other types of alcohol, despite the fact you would need to drink up to eight bottles of the stuff to get the same buzz as a light beer. In an age when we praise fermented foodstuffs for their proven health benefits, the fact that the US government regards kombucha closer to an IPA than a healthier alcohol-free alternative seems particularly steep.
The level of alcohol varies from brew to brew, but the ABV level of most commercial kombucha brands sits at around 0.5-1.5%, compared to averages of 4-12% for different types of full-strength beer, 15-20% for wine, and 35-50% for vodka. However, the Wall Street Journal (paywall) uncovered that GT’s Kombucha reportedly once had an ABV of 3.8%, which is not far off a light beer. This also technically means that you have to be over the age of 21 to purchase many varieties—while living in Portland, Oregon, I was asked for ID several times when buying a casual mid-morning brew.
Kombucha is a fermented tea that tastes less like a fizzy cup of chai and more like a tart glass of apple cider. It is made by seeping green or black tea in water with sugar and adding a SCOBY starter—short for Symbiotic Culture Of Bacteria and Yeast—to ferment the mixture. Once brewed, you can then add additional flavor profiles such as lemon, ginger, thyme, and cranberry. It’s a similar process to how cider or wine is made, where yeasts and bacteria convert the sugar in fruits such as grapes and apples into alcohol. As a result of this process, there is a trace amount of alcohol leftover when kombucha is made.
Kombucha is the fastest growing beverage market in the US and is expected to continue growing by 25% each year until 2020, at which point it will be a $1.8 billion dollar market. With the average bottle costing between $4-6, the lower tax rate the KOMBUCHA Act proposes could feasibly bring down the point-of-sale price for consumers, too. Which means more gut-goodness for all of us.