When the tax man comes for your kombucha

Published August 2, 2019 4:56pm ET



It’s official: We’re in the midst of a kombucha wave. While some associate the drink with trendy coastal hipsters, kombucha markets are expanding across the country. The fermented beverage, which usually contains some combination of tea, yeast and healthy bacteria, can now be found on grocery store shelves from New York to California and nearly everywhere in between.

Since earlier this decade, the kombucha sector has grown exponentially, with some estimates suggesting year-over-year growth as high as 25%. As encouraging as this boom has been, things are not all rainbows and unicorns for kombucha brewers. Unfortunately, under antiquated federal tax provisions, kombucha can occasionally become subject to alcohol excise taxes despite the fact that the product, by nature, only has trace amounts of alcohol. In light of this, both to promote commercial freedom and as part of a greater push to modernize outdated alcohol laws, fixing this accident of history should be a priority for federal lawmakers.

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