Bill > SB978

This bill amends Hawaii's tax code by changing the definition of "draft beer" from beer in an individual container of seven gallons or more to beer in an individual container of five gallons or more. The legislative findings explain that the existing tax scheme was problematic because most retailers, restaurants, bars, and small brewers use kegs smaller than seven gallons due to space constraints and limited production capabilities. Currently, draft beer is taxed differently based on container size, which the legislature considers unfair and inconsistent with how other alcoholic beverages are taxed. By lowering the container size threshold from seven to five gallons, the bill aims to align the legal definition with actual industry practices and remove what was seen as an unnecessarily restrictive and discriminatory taxation approach. The bill will take effect on July 1, 2025, giving businesses time to adjust to the new definition.

Business and Industry

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=978&year=2026