THE SENATE S.B. NO. 977 THIRTY-THIRD LEGISLATURE, 2025 STATE OF HAWAII A BILL FOR AN ACT RELATING TO INTOXICATING LIQUOR. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
THE SENATE S.B. NO. 977
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII
THE SENATE
S.B. NO.
977
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO INTOXICATING LIQUOR.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the existing tax rates applied to certain local small craft producer pub licensees discourage local manufacturing. Lowering the existing tax rates for certain local producers can help support local manufacturing and prioritize the economic development benefits that these producers bring to the State. Accordingly, the purpose of this Act is to: (1) Establish lower tax rates for certain small craft producer pub licensees; and (2) Increase the amounts of certain liquor that may be produced by small craft producer pub licensees. SECTION 2. Section 244D-1, Hawaii Revised Statutes, is amended as follows: 1. By adding a new definition to be appropriately inserted and to read as follows: ""Low alcohol by volume spirits beverage" means any alcoholic beverage containing not more than seven per cent alcohol by volume and includes distilled spirits mixed with other ingredients, including both nonalcohol and alcohol components." 2. By amending the definition of "liquor" to read: ""Liquor" has the same meaning as set forth in section 281‑1 and includes alcohol, and the liquor categories: beer, [draft beer,] cooler beverage, distilled spirits, low alcohol by volume spirits beverage, and wine." SECTION 3. Section 244D-4, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows: "(a) Every person who sells or uses any liquor in the State not taxable under this chapter, in respect of the transaction by which the person or the person's vendor acquired the liquor, shall pay a gallonage tax that is hereby imposed at the following rates for the various liquor categories defined in section 244D-1: On July 1, 1998, and thereafter, the tax rate shall be: (1) $5.98 per wine gallon on distilled spirits; (2) $2.12 per wine gallon on sparkling wine; (3) $1.38 per wine gallon on still wine; (4) $0.85 per wine gallon on cooler beverages; (5) $0.93 per wine gallon on beer other than draft beer; and (6) $0.54 per wine gallon on draft beer; provided that, for class 18 small craft producer pub licensees pursuant to section 281-31(r), for the period July 1, 2025, and thereafter, the tax rate shall be: (1) $1.98 per wine gallon on distilled spirits; (2) $1.38 per wine gallon on sparkling wine; (3) $1.28 per wine gallon on low alcohol by volume spirits beverages; (4) $0.90 per wine gallon on still wine; (5) $0.55 per wine gallon on cooler beverages; and (6) $0.35 per wine gallon on beer; and at a proportionate rate for any other quantity so sold or used." SECTION 4. Section 281-31, Hawaii Revised Statutes, is amended by amending subsection (r) to read as follows: "(r) Class 18. Small craft producer pub license. A small craft producer pub licensee: (1) Shall manufacture not more than: (A) [Seventy] One hundred seventy-five thousand barrels of malt beverages; (B) Twenty thousand barrels of wine; or (C) Seven thousand five hundred barrels of alcohol on the licensee's premises during the license year; provided that for purposes of this paragraph, "barrel" means a container not exceeding thirty-one gallons or wine gallons of liquor; (2) May sell malt beverages, wine, or alcohol manufactured on the licensee's premises for consumption on the premises; (3) May sell malt beverages, wine, or alcohol manufactured by the licensee in producer-sealed packages to class 3 wholesale dealer licensees pursuant to conditions imposed by the county by ordinance or rule; (4) May sell intoxicating liquor purchased from a class 3 wholesale dealer licensee to consumers for consumption on the licensee's premises. The categories of establishments shall be as follows: (A) A standard bar; or (B) Premises in which live entertainment or recorded music is provided. Facilities for dancing by the patrons may be permitted as provided by commission rules; (5) May, subject to federal labeling and bottling requirements, sell malt beverages manufactured on the licensee's premises to consumers in producer-sealed kegs and recyclable or reusable containers and sell malt beverages manufactured on the licensee's premises or purchased from a class 1 manufacturer licensee, a class 3 wholesale dealer licensee, a class 14 brewpub licensee, or a class 18 small craft producer pub licensee to consumers in growlers for off-premises consumption; provided that for purposes of this paragraph, "growler" means a recyclable or reusable container that does not exceed one gallon, which shall be securely sealed; (6) May, subject to federal labeling and bottling requirements, sell wine or alcohol manufactured on the licensee's premises in recyclable containers provided by the licensee or by the consumer which do not exceed: (A) One gallon per container for wine; and (B) One liter for alcohol; and are securely sealed on the licensee's premises to consumers for off-premises consumption; (7) Shall comply with all requirements pertaining to class 4 retail dealer licensees when engaging in the retail sale of malt beverages, wine, and alcohol; (8) May, subject to federal labeling and bottling requirements, sell malt beverages, wine, and alcohol manufactured on the licensee's premises in producer‑sealed containers directly to class 2 restaurant licensees, class 3 wholesale dealer licensees, class 4 retail dealer licensees, class 5 dispenser licensees, class 6 club licensees, class 8 transient vessel licensees, class 9 tour or cruise vessel licensees, class 10 special licensees, class 11 cabaret licensees, class 12 hotel licensees, class 13 caterer licensees, class 14 brewpub licensees, class 15 condominium hotel licensees, class 18 small craft producer pub licensees, and consumers pursuant to conditions imposed by county ordinances or rules governing class 1 manufacturer licensees and class 3 wholesale dealer licensees; (9) May conduct the activities under paragraphs (1) to (8) at locations other than the licensee's premises; provided that: (A) The manufacturing takes place in Hawaii; (B) Each of the other locations: (i) Operates within the State under the same trade name for the premises; and (ii) Is properly licensed within the county of its operation as a class 1 manufacturer licensee, class 2 restaurant licensee, class 4 retail dealer licensee, class 5 dispenser licensee, class 12 hotel licensee, class 14 brewpub licensee, or class 18 small craft producer pub licensee; (C) The county liquor commission of the county in which the licensee satellite is located shall have jurisdiction of the satellite; and (D) All requirements of the license class of the location shall be in effect as required by the county liquor commission for the satellite licensed premises; and (10) May allow minors, who are accompanied by a parent or legal guardian of legal drinking age, on the licensee's premises." SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 6. This Act shall take effect on July 1, 2025. INTRODUCED BY: _____________________________
SECTION 1. The legislature finds that the existing tax rates applied to certain local small craft producer pub licensees discourage local manufacturing. Lowering the existing tax rates for certain local producers can help support local manufacturing and prioritize the economic development benefits that these producers bring to the State.
Accordingly, the purpose of this Act is to:
(1) Establish lower tax rates for certain small craft producer pub licensees; and
(2) Increase the amounts of certain liquor that may be produced by small craft producer pub licensees.
SECTION 2. Section 244D-1, Hawaii Revised Statutes, is amended as follows:
1. By adding a new definition to be appropriately inserted and to read as follows:
""Low alcohol by volume spirits beverage" means any alcoholic beverage containing not more than seven per cent alcohol by volume and includes distilled spirits mixed with other ingredients, including both nonalcohol and alcohol components."
2. By amending the definition of "liquor" to read:
""Liquor" has the same meaning as set forth in section 281‑1 and includes alcohol, and the liquor categories: beer, [draft beer,] cooler beverage, distilled spirits, low alcohol by volume spirits beverage, and wine."
SECTION 3. Section 244D-4, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Every person who sells or uses any liquor in the State not taxable under this chapter, in respect of the transaction by which the person or the person's vendor acquired the liquor, shall pay a gallonage tax that is hereby imposed at the following rates for the various liquor categories defined in section 244D-1:
On July 1, 1998, and thereafter, the tax rate shall be:
(1) $5.98 per wine gallon on distilled spirits;
(2) $2.12 per wine gallon on sparkling wine;
(3) $1.38 per wine gallon on still wine;
(4) $0.85 per wine gallon on cooler beverages;
(5) $0.93 per wine gallon on beer other than draft beer; and
(6) $0.54 per wine gallon on draft beer;
provided that, for class 18 small craft producer pub licensees pursuant to section 281-31(r), for the period July 1, 2025, and thereafter, the tax rate shall be:
(1) $1.98 per wine gallon on distilled spirits;
(2) $1.38 per wine gallon on sparkling wine;
(3) $1.28 per wine gallon on low alcohol by volume spirits beverages;
(4) $0.90 per wine gallon on still wine;
(5) $0.55 per wine gallon on cooler beverages; and
(6) $0.35 per wine gallon on beer;
and at a proportionate rate for any other quantity so sold or used."
SECTION 4. Section 281-31, Hawaii Revised Statutes, is amended by amending subsection (r) to read as follows:
"(r) Class 18. Small craft producer pub license. A small craft producer pub licensee:
(1) Shall manufacture not more than:
(A) [Seventy] One hundred seventy-five thousand barrels of malt beverages;
(B) Twenty thousand barrels of wine; or
(C) Seven thousand five hundred barrels of alcohol on the licensee's premises during the license year;
provided that for purposes of this paragraph, "barrel" means a container not exceeding thirty-one gallons or wine gallons of liquor;
(2) May sell malt beverages, wine, or alcohol manufactured on the licensee's premises for consumption on the premises;
(3) May sell malt beverages, wine, or alcohol manufactured by the licensee in producer-sealed packages to class 3 wholesale dealer licensees pursuant to conditions imposed by the county by ordinance or rule;
(4) May sell intoxicating liquor purchased from a class 3 wholesale dealer licensee to consumers for consumption on the licensee's premises. The categories of establishments shall be as follows:
(A) A standard bar; or
(B) Premises in which live entertainment or recorded music is provided. Facilities for dancing by the patrons may be permitted as provided by commission rules;
(5) May, subject to federal labeling and bottling requirements, sell malt beverages manufactured on the licensee's premises to consumers in producer-sealed kegs and recyclable or reusable containers and sell malt beverages manufactured on the licensee's premises or purchased from a class 1 manufacturer licensee, a class 3 wholesale dealer licensee, a class 14 brewpub licensee, or a class 18 small craft producer pub licensee to consumers in growlers for off-premises consumption; provided that for purposes of this paragraph, "growler" means a recyclable or reusable container that does not exceed one gallon, which shall be securely sealed;
(6) May, subject to federal labeling and bottling requirements, sell wine or alcohol manufactured on the licensee's premises in recyclable containers provided by the licensee or by the consumer which do not exceed:
(A) One gallon per container for wine; and
(B) One liter for alcohol; and
are securely sealed on the licensee's premises to consumers for off-premises consumption;
(7) Shall comply with all requirements pertaining to class 4 retail dealer licensees when engaging in the retail sale of malt beverages, wine, and alcohol;
(8) May, subject to federal labeling and bottling requirements, sell malt beverages, wine, and alcohol manufactured on the licensee's premises in producer‑sealed containers directly to class 2 restaurant licensees, class 3 wholesale dealer licensees, class 4 retail dealer licensees, class 5 dispenser licensees, class 6 club licensees, class 8 transient vessel licensees, class 9 tour or cruise vessel licensees, class 10 special licensees, class 11 cabaret licensees, class 12 hotel licensees, class 13 caterer licensees, class 14 brewpub licensees, class 15 condominium hotel licensees, class 18 small craft producer pub licensees, and consumers pursuant to conditions imposed by county ordinances or rules governing class 1 manufacturer licensees and class 3 wholesale dealer licensees;
(9) May conduct the activities under paragraphs (1) to (8) at locations other than the licensee's premises; provided that:
(A) The manufacturing takes place in Hawaii;
(B) Each of the other locations:
(i) Operates within the State under the same trade name for the premises; and
(ii) Is properly licensed within the county of its operation as a class 1 manufacturer licensee, class 2 restaurant licensee, class 4 retail dealer licensee, class 5 dispenser licensee, class 12 hotel licensee, class 14 brewpub licensee, or class 18 small craft producer pub licensee;
(C) The county liquor commission of the county in which the licensee satellite is located shall have jurisdiction of the satellite; and
(D) All requirements of the license class of the location shall be in effect as required by the county liquor commission for the satellite licensed premises; and
(10) May allow minors, who are accompanied by a parent or legal guardian of legal drinking age, on the licensee's premises."
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect on July 1, 2025.
INTRODUCED BY: _____________________________
INTRODUCED BY:
_____________________________
Report Title: Small Craft Producer Tax Rate; Low Alcohol by Volume Spirits Beverages; Liquor Tax Description: Defines low alcohol by volume spirits beverages. Establishes lower tax rates for class 18 small craft producer pub licensees, including for low alcohol by volume spirits beverages. The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
Report Title:
Small Craft Producer Tax Rate; Low Alcohol by Volume Spirits Beverages; Liquor Tax
Description:
Defines low alcohol by volume spirits beverages. Establishes lower tax rates for class 18 small craft producer pub licensees, including for low alcohol by volume spirits beverages.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.