The Bubble Tax Modernization Act of 2025 modifies federal wine taxes by changing how mead and low-alcohol wines are classified and taxed under federal law. Specifically, the bill amends the tax code to define low-alcohol wine as beverages containing less than 8.5 percent alcohol by volume and no more than 0.64 grams of carbon dioxide per 100 milliliters, removing distinctions that previously treated mead and low-alcohol wines differently for tax purposes. This affects wine producers and importers, particularly those making mead and sparkling low-alcohol beverages, who may see changes in their tax obligations. The bill takes effect on January 1, 2026, applying to wines removed from production or imported after that date. No specific funding is allocated in the legislation, as it primarily restructures existing tax categories rather than creating new spending programs.
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