HB1371 would amend Hawaii’s liquor tax law to create a new category called “low alcohol by volume spirits beverage,” defined as an alcoholic beverage containing no more than 10% alcohol by volume, including distilled spirits mixed with nonalcoholic or alcoholic ingredients. The bill is aimed at ready-to-drink cocktails and similar products that are lower in alcohol content than traditional distilled spirits.
The measure would also add a new gallonage tax rate for this category: $1.10 per wine gallon beginning July 1, 2025. That rate is substantially below the existing tax on distilled spirits, which remains $5.98 per wine gallon, and is intended to reflect the lower alcohol content of these beverages. The bill states that current law taxes all beverages containing distilled spirits as if they were 100% alcohol, even when they are diluted, and that this discourages local production of ready-to-drink products.
Impact
If enacted, HB1371 would amend sections 244D-1 and 244D-4 of the Hawaii Revised Statutes by adding a new statutory definition and a separate tax classification for low-alcohol spirits beverages. It would change how certain mixed spirit products are taxed in Hawaii, lowering the tax burden on qualifying ready-to-drink beverages and potentially affecting distilleries, distributors, and retailers that produce or sell these products in the state.
Sentiment
The bill’s stated purpose and framing are strongly supportive of local distilleries and market competition, suggesting a favorable legislative intent toward the industry segment producing ready-to-drink cocktails. No committee transcripts or recorded votes were provided, so there is no direct evidence of opposition or support from lawmakers in the available materials beyond the bill’s own findings and description.
Contention
The main policy issue is tax fairness: supporters argue that taxing low-alcohol mixed drinks at the same rate as high-proof spirits is inequitable and discourages local production, while the existing tax structure appears to treat all distilled-spirit beverages similarly regardless of actual alcohol content. Potential points of contention include whether the new category could create tax classification complexity, whether it gives a market advantage to certain products, and whether lowering taxes on these beverages could reduce state revenue. No specific opposing individuals or groups are identified in the available record.
A resolution to direct the Clerk of the House of Representatives to only present to the Governor enrolled House bills finally passed by both houses of the One Hundred Third Legislature.
Relating to nonsubstantive additions to, revisions of, and corrections in enacted codes, to the nonsubstantive codification or disposition of various laws omitted from enacted codes, and to conforming codifications enacted by the 88th Legislature to other Acts of that legislature.