HB1374 amends Hawaii’s liquor tax and licensing laws to give class 18 small craft producer pub licensees a lower gallonage tax rate than other liquor sellers, beginning July 1, 2025. The bill also creates a new definition for “low alcohol by volume spirits beverage” and adds that category to the liquor tax framework, with a specific reduced tax rate for those beverages when produced or sold by qualifying small craft producer pub licensees.
The measure also expands the production limits for class 18 small craft producer pub licensees. It raises the maximum amount they may manufacture on-site during a license year from 70,000 barrels to 175,000 barrels of malt beverages, while retaining the existing caps for wine and alcohol production. The bill preserves and restates the range of sales and distribution activities these licensees may conduct, including on-premises sales, off-premises sales in certain containers, sales to wholesalers and other license classes, and operations at satellite locations under county licensing rules.
Impact
HB1374 would amend sections 244D-1 and 244D-4 of the Hawaii Revised Statutes to change the liquor tax treatment of certain small craft producer pub licensees and to recognize a new liquor category for low alcohol by volume spirits beverages. It would also amend section 281-31 to increase the production ceiling for class 18 small craft producer pub licensees. In practical terms, the bill would reduce tax liability for qualifying local producers, potentially lower costs for certain beverages, and expand the scale at which these businesses may operate in Hawaii.
Sentiment
The bill’s stated purpose and structure suggest a favorable view toward local craft alcohol producers and economic development. The legislative findings describe current tax rates as discouraging local manufacturing, and the bill is framed as a support measure for Hawaii-based production. No committee transcripts or votes are available in the provided record, so there is no direct evidence of opposition or support from hearings; however, the text itself reflects a pro-industry, pro-local-business sentiment.
Contention
The main policy issue is whether lower liquor taxes and higher production limits for class 18 small craft producer pub licensees are an appropriate way to support local manufacturing. Supporters would likely emphasize economic development, business growth, and competitiveness for Hawaii producers. Potential concerns could include reduced state tax revenue, preferential treatment for a specific license class, and whether expanding production limits could affect competition with other liquor licensees or raise regulatory oversight questions. The bill does not show recorded opposition in the provided materials, but those are the likely points of debate.