Bill > SB980

This bill creates a new legal definition for "low alcohol by volume spirits beverage" and establishes a specific tax rate for these drinks, addressing an existing inequity in alcohol taxation. The bill defines low alcohol by volume spirits beverages as alcoholic drinks containing 10% or less alcohol by volume, including mixed drinks with distilled spirits and other ingredients. Beginning July 1, 2025, the bill introduces a new tax rate of $1.10 per wine gallon specifically for these low-alcohol beverages, which is significantly lower than the $5.98 per wine gallon tax on distilled spirits. The legislature's motivation for this bill stems from recognizing that current tax laws unfairly treat low-alcohol ready-to-drink cocktails by taxing them as if they were pure alcohol, which discourages local distilleries from producing such beverages. By creating a more nuanced tax structure that reflects the actual alcohol content of these drinks, the bill aims to encourage local production, enable fairer market competition, and align tax rates more closely with the actual characteristics of different alcoholic beverages.

Business and Industry

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=980&year=2026