Standing in front of the Humm Kombucha processing plant in Bend, U.S. Rep. Greg Walden, R-Hood River, said Friday an antiquated law that taxes kombucha manufacturers is holding back the industry.
“The law was written when this wasn’t around,” Walden said Friday while he was in Bend on a tour of Humm’s Brinson Boulevard facility to show his support for kombucha manufacturing. “There’s a legacy provision in the law that treats kombucha products as taxable.”
Walden co-sponsored the bill, titled the Keeping Our Manufacturers from Being Unfairly taxed while Championing Health Act, or KOMBUCHA.
The measure is before the U.S. House Ways and Means Committee but has not been set for hearing.
Kombucha is a fermented tea that is said to aid in digestion and improve immune health, according to Grand View Research, a market research firm headquartered in San Francisco. It contains about 1 percent alcohol by volume, which under current law means it falls under the federal Alcohol and Tobacco Tax and Trade Bureau and is subject to federal alcohol excise taxes.
If approved, the proposed measure will raise the limit to 1.25 percent alcohol by volume, making kombucha exempt from federal alcohol tax and regulation, Walden said.
“We want to fix the problem for the startup here,” Walden said. “But across the country this is a problem.”
No details were available on how much tax has been paid by kombucha manufacturers.
Founded by Jamie Danek and Michelle Mitchell in 2009, Humm Kombucha has been working with Walden and other lawmakers for more than a year to get the bill introduced.
Humm is the largest producer of kombucha in Bend. It moved into its current facility, a 31,000-square-foot former warehouse on Brinson Boulevard where it operates the brewery and the corporate offices, in 2016. It has a taproom on NE Second Street that it moved to in 2013.
Late last year the company announced it would build a 100,000-square-foot facility in Roanoke, Virginia, in the same industrial park where Bend-based Deschutes Brewery will build its second production facility. The Roanoke facility is expected to come online in 2019.
The company produces 10 flavors of kombucha, with coconut lime being the best seller. Its products can be found in all 50 states and Sweden and is available in Costco, Target and Walmart stores, according to the company’s website.
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