Circuit Split Sets Stage for Supreme Court to Strike Down Federal Law Making Home Distilling a Felony

Looking up “home still” on Amazon reveals a broad assortment of devices designed to separate and concentrate the most volatile components of a liquid mixture. A lot of these are marketed explicitly as gadgets intended to produce alcoholic beverages such as whiskey, brandy, gin, and vodka. Yet purchasing one with the plan to use it for that purpose would constitute a federal crime.

The federal prohibition on domestic production of distilled spirits has existed since 1868, when Congress enacted it as part of a broader scheme aimed at collecting taxes on alcohol. But two recent federal appellate rulings threaten to loosen the grip of this long-standing, widely flouted, and inconsistently enforced prohibition for hobbyists who distill at home.

In McNutt v. U.S. Department of Justice, decided last month, the U.S. Court of Appeals for the 5th Circuit held that the prohibition on home distilling cannot be justified as a revenue measure. Eleven days later, in Ream v. U.S. Department of Treasury, the U.S. Court of Appeals for the 6th Circuit disagreed, asserting that the federal government’s taxation power, combined with the Constitution’s grant to Congress to make all laws that are “necessary and proper” for executing its enumerated powers, sufficiently supports the prohibition. The two decisions in quick succession created a circuit split that the Supreme Court may weigh in on, given the broad implications for federal authority in areas with potentially far-reaching consequences.

Under 26 USC 5178(a)(1)(B), “no distilled spirits plant for the production of distilled spirits shall be located in any dwelling house, in any shed, yard, or inclosure connected with any dwelling house, or on board any vessel or boat.” The penalty for violating that prohibition is set forth in 26 USC 5601(a)(6): a fine of up to $10,000, up to five years in prison, or both.

The 5th Circuit upheld a permanent injunction that U.S. District Judge Mark T. Pittman issued in 2024. That ruling barred the federal government from enforcing the home distilling ban against the lead plaintiff, Scott McNutt, and other members of the Hobby Distillers Association (HDA). Beyond finding that the prohibition is not a valid exercise of the congressional taxing power, Pittman rejected the argument that it could be justified under the power to regulate interstate commerce.

The 5th Circuit did not consider the Commerce Clause rationale because the government abandoned it on appeal. Yet the court agreed with Pittman that the home distilling ban does not qualify as a tax measure.

On its face, Judge Edith Jones observed in an opinion joined by the other two judges on the panel, the provisions McNutt challenged have nothing to do with collecting taxes. “Neither provision raises revenue,” Jones wrote. “Not only do they prohibit at-home distilleries, but in so doing, they amount to an anti-revenue provision that prevents distilled spirits from coming into existence. The provisions operate to reduce revenue instead of raising it.”

That framework, Jones said, “violates the Supreme Court’s explanation of how the federal power of taxation works.” In the 2012 case NFIB v. Sebelius, Chief Justice John Roberts noted that the imposition of a tax “leaves an individual with a lawful choice to do or not do a certain act, so long as he is willing to pay a tax levied on that choice.” But in this case, the plaintiffs “have only the choice not to do as they wish or risk fines and imprisonment.”

The government argued that the ban aids tax collection by prohibiting a form of liquor production that is difficult to detect. “But just as ‘Congress cannot authorize a trade or business within a State in order to tax it,’ it stands to reason that Congress cannot prohibit intrastate activity solely because it might produce products hard to tax,” Jones wrote. “Congress’s taxing power ‘reaches only existing subjects,’ not activity that may generate subjects of taxation. Put otherwise, preventing activity lest it give rise to tax evasion places no limit whatsoever on Congress’s power under the taxation clause.”

If the Taxing Clause alone is not enough to justify the ban, the government argued that the Necessary and Proper Clause supplies the answer. “That clause has been characterized as the ‘last, best hope of those who defend ultra vires [i.e., illegal] congressional action,’” Jones noted, adding that the government’s reliance on the clause is misplaced because the home distilling ban is not “necessary and proper” for collecting taxes.

“Prohibiting at-home distilleries is not ‘plainly adapted’ to effectuate Congress’s taxation of spirits,” Jones wrote, quoting the Supreme Court’s interpretation of “necessary” in the landmark 1819 case McCulloch v. Maryland. “The provisions challenged here do not tax the distilled spirits or the still; they flatly prohibit and penalize distillation inside a home or in any yard or shed connected to a home. Because these provisions tax nothing, and are distinct from the regulation of distilling alcoholic products that is permitted by federal tax law, they do not help Congress raise revenue. On the contrary, the statutes reduce revenue by preventing individuals from making distilled spirits.”

Jones also agreed with the plaintiffs that “banning and criminalization of at-home distilling is not a proper means of exercising the tax power because it takes away [their] choice to pay the tax by engaging in otherwise legal, albeit licensed and regulated, activity.” Under the government’s logic, she noted, “Congress may criminalize nearly any at-home conduct only because it has the possibility of concealing taxable activity. Home-based businesses may be forbidden. Remote work may be deemed a crime.” The Necessary and Proper Clause, she said, “cannot expand the reach of the taxing power to criminalize conduct that could produce taxable revenue under the pretext that generating revenue for the federal government will be enhanced.”

The 6th Circuit, by contrast, viewed the matter differently, pointing out that Congress in 1868 acted with a clear aim of curbing widespread evasion of federal liquor taxes. “The 1868 Act was a monumental effort, running some 109 sections, to bring these ‘stupendous frauds’ to an end,” Judge Raymond Kethledge wrote in an opinion joined by Judge Eugene E. Siler Jr. “The ban’s inclusion was apparently uncontroversial, prompting not even a murmur of debate. Even now its rationale is almost self-evident: stills are more easily hidden in homes than in bonded premises dedicated to distilling spirits; and—as both a legal and practical matter—‘dwelling houses’ are much harder to search at ‘all times, as well by night as by day,’ than bonded premises are.”

The lead plaintiff in the 6th Circuit case, would-be distiller John Ream, warned that upholding the ban on home liquor production would invite government meddling of all sorts in Americans’ private lives. For instance, he said, “the federal government could impose a nominal excise tax on baking bread or making clothing and [then] prohibit home bread-baking or home sewing on the theory that home-sewers or home-bakers are less likely to pay the tax.”

Although Jones believed such possibilities were a compelling reason to deem the ban improper, Kethledge was unmoved. “Those ‘theories’ are merely that,” he wrote, “and they would strip away nearly all the particular facts on which the judgment here is based.”

Judge Andre Mathis dissented, but not because he disagreed with Kethledge’s assessment of the home distilling ban. Rather, Mathis believed Ream lacked standing to sue. “Typically, a party challenging the constitutionality of a federal law must wait for the government to enforce the law against him,” Mathis wrote. Although there are exceptions, he said, Ream “has failed to show that his intention to distill spirits at home ‘generates a certainly impending threat of prosecution.’”

Given the sporadic enforcement of the ban (as shown by the fact that vendors openly supply home distillers with the equipment they need), that test will often be difficult to meet. Yet liquor hobbyists do occasionally face enforcement threats. In 2014, for instance, McNutt received a “Notice of Potential Civil and Criminal Liability” from the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB).

The TTB stated it had reason to believe McNutt “may have purchased a still capable of producing alcohol and/or equipment and materials that may be used in the manufacture of a still.” It warned that “federal law provides no exemptions for the production of distilled spirits for personal or family use” at any location other than a government-approved distillery. The TTB added that “unlawful production of distilled spirits is a criminal offense,” which it erroneously claimed was “punishable by a fine of up to $500,000” as well as “imprisonment for not more than 5 years.” It also attached a document noting that the TTB collaborates with state authorities in “targeting illegal possession of stills and illegal production of distilled spirits.”

The 6th Circuit’s ruling means home distillers in Kentucky, Michigan, Ohio, and Tennessee remain exposed to such threats. But thanks to the injunction upheld by the 5th Circuit, individuals who brew liquor at home in Louisiana, Mississippi, and Texas cannot be arrested for doing so—provided they are members of the HDA and secure a federal permit.

That second criterion could prove challenging. “The injunction does not mean that you cannot be charged for distilling at home!” the HDA warns. “The injunction simply means that you cannot be denied a DSP (Distilled Spirits Plant) permit just because you want to set up at home. You still must apply for the permit and comply with all the rules that apply to a regular DSP.”

In a recent interview with The Spill, Aaron Hyde, author of How to Distill: A Complete Guide From Still Design and Fermentation through Distilling and Aging Spirits, said he had seen “no update based on the ruling” from the TTB that would provide a framework or license for lawful home distilling. Although “we’re making steps forward,” he said, “it’s not legalized yet.”

In 2024, West Virginia Governor Jim Justice signed legislation authorizing home production of liquor under state law. Hyde hopes Congress will follow West Virginia’s lead by legalizing home distilling, as it did with home brewing in 1978. That change sparked a flourishing craft beer scene in the United States, driven by entrepreneurs who refined their craft by participating in the newly legalized hobby. “Take note of what legalizing homebrewing in 1978 did for craft brewing and what craft brewing did for beer culture here in the United States,” Hyde said, noting that the home distilling ban is “counterproductive to further developing a strong distilling and spirits culture in this country.”

The Competitive Enterprise Institute (CEI), which helped advance the arguments that prevailed in McNutt, notes that the implications of the decision extend far beyond home distilling. CEI General Counsel Ondray Harris writes that the Fifth Circuit addressed “a much broader question central to our constitutional structure of enumerated powers: whether Congress may use its taxing power to prohibit peaceful, private conduct inside the home. The court’s answer was no.”

That, Harris contends, is a major development because the taxing power could otherwise serve as a license for wide-ranging interference with people’s habits and hobbies: “If Congress can prohibit an activity simply because it might complicate taxation, what can it not regulate? The government’s theory had no limiting principle. It would allow federal authority to reach nearly every aspect of private life—especially activities conducted in the home—so long as some connection to revenue could be asserted. The Constitution does not permit that kind of open-ended power.”