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SB2912
THE SENATE
S.B. NO.
2912
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII
A BILL FOR AN ACT
relating
to liquor
.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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SECTION
1
.
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The legislature finds that the existing tax
rates applied to vendors selling liquor disproportionately affect small craft
producer pub licensees, making it difficult for them to thrive
economically.
�
Small craft producer pub
licensees in the State face significantly higher operational costs in
comparison to large, multinational corporations.
�
Because small businesses are essential to the
State's economy, it is imperative to address this disparity and foster a fair
and supportive environment for small businesses.
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The legislature further finds that lowering
existing tax rates for certain local producers can help support local
manufacturing and the diversification of the State's economy.
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Accordingly, the purpose of this Act is to:
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(1)
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Establish lower tax rates for certain
small craft producer pub licensees;
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(2)
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Increase the amounts of certain liquor
that may be manufactured by a class 18 small craft producer pub licensee;
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(3)
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Increase the amount of alcohol a class 18
small craft producer pub licensee may sell to consumers in recyclable
containers; and
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(4)
�
Authorize class 18 small craft producer pub
licensees to sell a certain number of barrels of malt beverages, wine, and
cooler and low alcohol beverages to any class of licensee except for class 3
wholesaler dealer licensees.
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SECTION
2
.
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Section 244D-1,
Hawaii Revised Statutes, is amended as follows:
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1.
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By adding a new definition to be
appropriately inserted and to read:
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"
"Low
alcohol spirits beverage" means any alcoholic beverage made by a small
craft producer containing not more than seven per cent alcohol by volume and
includes distilled spirts mixed with other ingredients, including both
nonalcohol and alcohol components.
"
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2.
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By amending the definition of
"liquor" to read:
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""Liquor"
has the same meaning as set forth in section 281‑1 and includes
alcohol, and the liquor categories:
�
beer, [
draft beer,
] cooler beverage,
low alcohol spirits
beverage,
distilled spirits, and wine."
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SECTION
3
.
�
Section 244D-4,
Hawaii Revised Statutes, is amended by amending subsection (a) to read as
follows:
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"
(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:
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(1)
�
On
July 1, 1998, and thereafter, the tax rate shall be:
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[
(1)
]
(A)
�
$5.98 per wine gallon on distilled spirits;
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[
(2)
]
(B)
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$2.12 per wine gallon on sparkling wine;
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[
(3)
]
(C)
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$1.38 per wine gallon on still wine;
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[
(4)
]
(D)
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$0.85 per wine gallon on cooler beverages;
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[
(5)
]
(E)
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$0.93 per wine gallon on beer other than draft
beer; and
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[
(6)
]
(F)
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$0.54 per wine gallon on draft beer;
and
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(2)
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Notwithstanding
paragraph (1), for a class 18 small craft producer pub licensee pursuant to
section 281‑31(r), for the period beginning July 1, 2026,
and thereafter, the tax rate shall be:
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(A)
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$1.98 per wine gallon on distilled spirits;
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(B)
�
$1.38 per wine gallon on sparkling wine;
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(C)
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$0.90 per wine gallon on still wine;
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(D)
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$0.55 per wine gallon on low alcohol
spirits beverages;
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(E)
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$0.55 per wine gallon cooler beverages; and
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(F)
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$0.35 per wine gallon on beer;
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and at a proportionate rate for any
other quantity so sold or used."
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SECTION
4
.
�
Section 281-31,
Hawaii Revised Statutes, is amended by amending subsection (r) to read as
follows:
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"(r)
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Class 18.
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Small craft producer pub license.
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A small craft producer pub licensee:
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(1)
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Shall manufacture not more than:
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(A)
�
[
Seventy
]
One hundred fifty
thousand barrels of malt beverages;
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(B)
�
[
Twenty
]
Forty
thousand
barrels of wine; [
or
]
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(C)
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One hundred thousand barrels of
cooler beverages;
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(D)
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One hundred thousand barrels of low alcohol
volume spirits beverages; or
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(E)
�
[
Seven thousand five hundred
]
Twenty
thousand
barrels of alcohol on the licensee's premises during the license
year;
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provided
that for purposes of this paragraph, "barrel" means a container not
exceeding thirty-one gallons or wine gallons of liquor;
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(2)
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May sell malt beverages, wine, or
alcohol manufactured on the licensee's premises for consumption on the
premises;
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(3)
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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;
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(4)
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May sell intoxicating liquor purchased
from a class 3 wholesale dealer licensee to consumers for consumption on the
licensee's premises.
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The categories of
establishments shall be as follows:
���������
(A)
�
A standard bar; or
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(B)
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Premises in which live entertainment or
recorded music is provided.
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Facilities
for dancing by the patrons may be permitted as provided by commission rules;
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(5)
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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;
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(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
]
that
do not exceed:
���������
(A)
�
One gallon per container for wine; and
���������
(B)
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One [
liter
]
and three
quarters liters
for alcohol; and
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are
securely sealed on the licensee's premises to consumers for off-premises
consumption;
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(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;
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(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;
provided that
any sale to a licensee of any class, except for a class 3 wholesale dealer
licensee, shall not exceed:
���������
(A)
�
Seventy thousand barrels of malt
beverages;
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(B)
�
Twenty thousand barrels of wine; and
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(C)
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Seven thousand five hundred barrels of
alcohol;
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(9)
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May conduct the activities under
paragraphs (1) to (8) at locations other than the licensee's premises; provided
that:
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(A)
�
The
manufacturing takes place in
Hawaii;
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(B)
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Each of the
other locations:
��������������
(i)
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Operates within the State under the
same trade name for the premises; and
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(ii)
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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;
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(C)
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The county liquor commission of the
county in which the licensee satellite is located shall have jurisdiction of
the satellite; and
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(D)
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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
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(10)
�
May allow minors, who are accompanied
by a parent or legal guardian of legal drinking age, on the licensee's
premises."
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SECTION
5.
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Statutory material to be repealed is
bracketed and stricken.
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New statutory
material is underscored.
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SECTION
6.
�
This Act shall take effect on July 1,
2026.
INTRODUCED BY:
_____________________________
Report Title:
Liquor
Tax; Small Craft Producer Pub Licensees; Tax Rate; Low Alcohol Spirits
Beverages; Manufacture Limits; Increase
Description:
Defines
"low alcohol spirits beverages".
�
Establishes lower tax rates for class 18 small craft producer pub
licensees, including for low alcohol spirits beverages.
�
Increases the amount of alcohol that a class
18 small craft producer pub licensee may manufacture.
�
Increases the amount of alcohol a class 18
small craft producer pub licensee may sell to consumers in recyclable
containers.
�
Authorizes class 18 small
craft producer pub licensees to sell a certain number of barrels of malt
beverages, wine, and cooler and low alcohol beverages to any class of licensee,
except for class 3 wholesaler dealer licensees.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.