Is Non-Alcoholic Beer Taxable?
At the federal level, a drink with less than 0.5% alcohol by volume does not meet the regulatory definition of beer in the federal brewer rules (27 CFR 25.11). State and local taxes are set separately, and we found no official source that gives one rule for all states.
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We use your email only for this download.Where the federal line sits
The federal rules for brewers define beer as fermented beverages “containing one-half of one percent or more of alcohol by volume” (27 CFR 25.11). A product below that line is not beer under that definition.
We did not find a Treasury page that states the tax result for non-alcoholic beer in one sentence, so treat this as how the definition reads, not as tax advice.
What the label must say
Under 27 CFR 7.65, “non-alcoholic” may be used on a malt beverage label only with a statement that it contains less than 0.5 percent alcohol by volume. “Alcohol free” may be used only on malt beverages that contain no alcohol.
What we could not confirm
- Whether your state charges its beer tax on non-alcoholic beer.
- Whether sales tax applies in your state or city. Sales tax on groceries and soft drinks differs by place.
For a firm answer, ask your state revenue department or a tax professional. See also our laws and travel guides.
People also ask
Is non-alcoholic beer taxed as beer?
Federal rules define beer as 0.5% alcohol by volume or more (27 CFR 25.11), so a drink below that is not beer under that definition. State rules may differ.
What does non-alcoholic mean on a beer label?
On a malt beverage it may be used only with a statement that the drink contains less than 0.5 percent alcohol by volume (27 CFR 7.65).
Is alcohol free the same as non-alcoholic?
No. Under 27 CFR 7.65, alcohol free may be used only on malt beverages containing no alcohol.
Sources
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