S.Amdt. 4540

SA 4540. Mr. WYDEN submitted an amendment intended to be proposed by
him to the bill S. 1383, to establish the Veterans Advisory Committee
on Equal Access, and for other purposes; which was ordered to lie on
the table; as follows:

At the appropriate place, insert the following:

SEC. ___. TAX-FREE PRODUCTION OF LOW ALCOHOL BY VOLUME
KOMBUCHA.

(a) Exemption From Tax on Wine.--Section 5042(a) of the
Internal Revenue Code of 1986 is amended by adding at the end
the following:
``(4) Low alcohol by volume kombucha.--
``(A) In general.--Subject to regulations prescribed by the
Secretary, low alcohol by volume kombucha shall not be
subject to--
``(i) tax as wine, or
``(ii) the provisions of subchapter F.
``(B) Definition.--For purposes of this chapter, the term
`low alcohol by volume kombucha' means a beverage which--
``(i) is fermented solely by a symbiotic culture of
bacteria and yeast,
``(ii) contains not more than 1.25 percent of alcohol by
volume,
``(iii) is sold or offered for sale as kombucha, and
``(iv) is derived from--

``(I) fermentable sugars, including sugar, malt or malt
substitute, honey, and fruit juice, and
``(II) plant materials, including tea and coffee.''.

(b) Exemption From Tax on Beer.--Section 5053 of the
Internal Revenue Code of 1986 is amended--
(1) by redesignating subsection (i) as subsection (j), and
(2) by inserting after subsection (h) the following new
subsection:
``(i) Production of Low Alcohol by Volume Kombucha.--
Subject to regulations prescribed by the Secretary, low
alcohol by volume kombucha (as defined in section
5042(a)(4)(B)) shall not be subject to--
``(1) tax as beer, or
``(2) the provisions of subchapter G.''.
(c) Effective Date.--The amendments made by this section
shall apply to calendar quarters beginning after the date of
enactment of this Act.
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