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Oregon Lawmakers Hope to Free Kombucha From Beer Taxes

March 28, 2019, 7:55 PM

Three Oregon lawmakers reintroduced a bill to shield kombucha from taxes generally applicable to beer.

The bill would create an exemption from taxes on brewers and beer under tax code Sections 5052 and 5053 for kombucha producers. The measure was reintroduced in both houses by Sen. Ron Wyden (D-Ore.) and Reps. Earl Blumenauer (D-Ore.) and Greg Walden (R-Ore.).

  • The bill defines kombucha as having no more than 1.25 percent alcohol and being derived from sugar, malt or malt substitute, tea, or coffee and “not more than 20 percent other wholesome ingredients.”
  • Market research firm Grand View Research projects the global kombucha market will grow to $5.45 billion by 2025.
  • Wyden previously introduced a version (S. 389) of the bill in February 2017. Former Rep. Jared Polis (D-Colo.), now Colorado governor, introduced the House companion (H.R. 1089). Both bills included Republican co-sponsors.
  • Kombucha Brewers International, a nonprofit trade association, has paid McDermott Will & Emery LLP $120,000 to lobby Congress on the two bills since their introduction, disclosure forms show. Coca-Cola Co. has also lobbied on the Senate bill.

To contact the reporter on this story: Lydia O'Neal in Washington at loneal@bloombergtax.com

To contact the editors responsible for this story: Patrick Ambrosio at pambrosio@bloombergtax.com; Colleen Murphy at cmurphy@bloombergtax.com

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