Bubble Tax Modernization Act of 2025

This bill updates federal wine tax rules so that mead and low‑alcohol wine are treated the same for tax purposes. It says “low alcohol by volume wine” counts as a still wine if it has 16% alcohol or less. It also defines low‑alcohol wine as under 8.5% alcohol and with very little carbonation (no more than 0.64 grams of carbon dioxide per 100 milliliters), with small allowances allowed by regulation.

This change takes effect for wine that leaves a winery or is imported after December 31, 2025.

• Who is affected: mead makers, low‑alcohol wine producers, importers, distributors, and shoppers who may see simpler pricing and tax treatment.
• What changes: mead is no longer taxed differently from low‑alcohol wine; low‑alcohol wine is treated like still wine if it meets alcohol and carbonation limits.
• When: applies to wine removed after December 31, 2025.