Kentucky will be the first state in the nation to tax alcoholic beverages based on their alcohol content under a bill approved by the state House.

The measure, which passed 63-31, was sent to the state Senate. It includes alcohol, cannabis-infused beverages, hemp-derived cannabinoids and products like kratom, all while laying out the framework to capture any new and emerging products as they come into the marketplace,” said Rep. Matthew Koch (R), one of the sponsors.

He said the bill is designed to be "neutral-ish" in terms of revenue. The legislation would also establish a new 4% regulatory licensing fee on alcoholic and cannabis-infused beverages beginning July 1, 2027. Other taxes were eliminated to make the bill revenue neutral, Kch said.

The bill would also streamline the local regulatory license fee collected by cities and counties. The fee would be capped at 5% within a year. Cities that drop that fee to 3% will be able to use the revenue for any emergency services, not just for treating alcohol-related emergencies.

The measure also strengthens penalties on thooe retailers who sell to minors. It also provides for proper lab testing and labeling so hemp can be taxed properly.

REp. Lisa Willner (D) asked Koch to clarify who would be paying the taxes on he products. "The same peope who have always paid tax on these products," Koch said.

“This is a realignment of taxes, not to shift it to consumers, because consumers are paying all the taxes now,” Rep. Jason Petrie, R said. “It’s just written into the price. This is just a realignment of where it’s collected.”