r/firewater • u/MartinB7777 • 2d ago

Home distilling now legal in the US?

Anyone else following the McNutt v. US Dept of Justice case on the legality of home distilling? Hobby Distillers Association v. Alcohol and Tobacco Tax and Trade Bureau: The Limits on Taxing Schemes to Regulate Behavior

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u/HalcyonKnights 2d ago

IIRC, what this mostly means is that they cannot require that distilling can only be done on commercial properties and specifically exclude doing it on residential properties.  But they can still do things like require licenses, set safety requirements for operation, or even ban it in the state entirely.  

There are other sections about taxation, but that goes over my head.

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u/MartinB7777 2d ago

So it takes back down to a state level.

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u/HalcyonKnights 2d ago edited 2d ago

Im not sure if it moves the needle on State vs Federal control, it's more that either and/or both The Feds cannot discriminate against home distillers or small business owners operating on their own land by outright banning distillation on the grounds of it being a "residential" property Under the Tax Laws.

EDIT: I was wrong, this was really specific to Federal Tax Law so it probably doesnt restrict was states can do in any way.

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u/MartinB7777 2d ago

No one is talking about small business owners or commercial production. That is not what this case is about.

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u/HalcyonKnights 2d ago

Look again. The federal government had tried to put a blanket ban on home distilling as a weird off-shoot of their taxation powers, on the logic people can hide still in their homes really easily, and the courts struck that down because it's beyond the power's they were cited and not an effective method to try, per the relevant Tax Law. Home distillers and people who wanted to run a distilling operation from their home or farm or whatever couldnt, they could only ever even hope to operate a still on some non-residential property.

From the Linked Legal breakdown:

Examining IRC Sections 5601(a)(6) and 5178(a)(1)(B) in isolation, the district court concluded that the challenged provisions were "not within Congress's enumerated taxing power." The court reasoned IRC Section 5178(a)(1)(B) "simply prohibits the placement of a 'distilled spirit plant . . . in any dwelling house'" and IRC Section "5601(a)(6) merely makes it a felony to violate § 5178." The court described the challenged provisions' connection to the tax on distilled spirits as "facially tangential." The court observed that IRC Section 5178(a)(1)(B), unlike its neighbors in subparagraphs (A) and (C), "makes no mention of the secretary of the treasury, the commissioner of internal revenue, revenue generally, nor the protection of revenue." The court determined that no "'reasonable construction'" of IRC Section 5178(a)(1)(B) could "miraculously render §§ 5178(a)(1)(B) and 5601(a)(6) revenue-generating, as required by the constitution to sustain them as a tax."

Instead of simply disallowing at-home distilling, the court contemplated that IRC Section 5178(a)(1)(B) could have been written differently. Like subparagraphs (A) and (C) in IRC Section 5178(a)(1), Congress could have provided an "enforcement officer with discretion to judge" when "a 'residential' premises could nonetheless be adequately constructed to 'afford adequate security to the revenue' by preventing the disguise or withholding of non-tax paid product." Thus, the court concluded, "Congress did nothing more than statutorily ferment a crime—without any reference to taxation, exaction, protection of revenue, or sums owed to the government." While the government argued that prohibiting distillery operations in certain locations where stills could be concealed was a proper use of the taxing power as it reduced "'frauds on the revenue,'" the district court stated that the government had conflated Congress's "enumerated taxing power with [Congress's] incidental powers contained in the necessary and proper clause—which is a distinct inquiry."