In the summer of 1868, Congress cut the federal tax on whiskey from $2 a proof gallon to 50 cents, and in the same act it barred anyone from running a still in a dwelling house or in any shed, yard or enclosure connected to one. More than 150 years later, that second clause can still send a hobbyist with a copper pot still in the garage to federal prison for up to five years and cost him a $10,000 fine.
On October 19, the US Supreme Court agreed to decide whether Congress ever had the power to pass it. The case, Department of Justice v. McNutt, turns on an awkward fact about a provision written into a revenue law: it collects no revenue at all, because it forbids the production that would generate any tax. Two federal appeals courts read that fact in opposite ways within 11 days of each other in April, and the justices must now say whether banning a place of production can count as a way of collecting a tax.
The ban was born in a Reconstruction-era country that believed it was losing most of its whiskey money.
Why Congress Banned the Home Still in 1868
The 1868 act that cut the whiskey tax from $2 a proof gallon to 50 cents also barred stills from homes. Photo by Roger Ce on Unsplash
The Civil War pushed the spirits excise from 20 cents a gallon to $2, a rate that made legal whiskey far dearer than the illicit kind. In 1867, a House committee claimed that at least seven-eighths of all the spirits made under the existing law had escaped taxation. The figure was an allegation in a political report rather than a measured statistic, but it framed the debate. The 1868 act answered with a much lower rate, tighter controls on distillers and the ban on stills in and around homes.
The logic was practical, because a still in a bonded plant could be inspected at any hour, while a still in a farmhouse kitchen sat behind the legal protection of the home. The same committee also floated a simpler alternative, taxing the capacity of a distillery rather than chasing every gallon it produced.
Legitimate merchants were still losing sales to untaxed stills a generation later. In 1893 a young Julian “Pappy” Van Winkle went on the road selling W. L. Weller whiskey by horse and buggy through the hills of Kentucky and West Virginia, and he could spot his rivals by the smoke rising from hillside stills. Those moonshiners paid no excise and undercut him on price, and he later remembered that some of them bought legal whiskey to stretch their own.
Two Courts, One History, Opposite Answers on the Home Distilling Ban
Both appeals courts accepted that history, and both agreed that the taxing power on its own cannot justify the home distilling ban, because the ban prohibits conduct rather than demanding payment. They split over the Necessary and Proper Clause, which lets Congress pass laws that help carry out its other powers.
The Fifth Circuit ruled on April 10 for four Texas hobbyists and the Hobby Distillers Association, and held that the ban reduces revenue by stopping taxable spirits from ever existing. Judge Edith Jones warned that if Congress could outlaw a lawful activity in the home simply to make tax collection easier, the reasoning “invites a question: what cannot be banned?”
The Sixth Circuit disagreed on April 21 in a case brought by John Ream, an Ohio brewpub owner who wants to make whiskey at home for his own use. Judge Raymond Kethledge reasoned that homes are harder to search than bonded premises, that home-distilled spirits would replace taxed bottles on the shelf, and that many home distillers would not pay duty anyway. By steering drinkers toward taxed whiskey, he wrote, “the ban’s purpose is actually to collect revenue.” Pappy Van Winkle’s complaint about untaxed competition is, in effect, the commercial version of that argument.
Judge Andre Mathis dissented because he would have thrown Ream’s case out on standing. He noted that the most recent conviction under the specific location provision that Ream could identify came from 1970. Illegal distilling has been prosecuted since then, but typically under other offenses, such as running an unregistered still or producing spirits unlawfully.
What Striking Down the Ban Would Not Change
Barrels from Kentucky Peerless Distilling Co, stenciled with its federal registration number, DSP-KY-50. Even if the home distilling ban falls, making spirits legally in the US will still mean a licensed, bonded distillery. Photo by Daniel Norris on Unsplash
The Justice Department chose to appeal the Fifth Circuit decision, so the justices will rule on the location provision challenged there. Even a defeat for the government would leave the rest of federal spirits law standing.
The Alcohol and Tobacco Tax and Trade Bureau says federal law strictly prohibits individuals from producing distilled spirits at home, and it lists a range of separate felonies. These include possessing an unregistered still, operating as a distiller without registering and producing spirits unlawfully, each carrying the same five-year maximum. Adults may make beer and wine at home for personal use, but there is no equivalent allowance for spirits. Excise tax, bonding and record-keeping duties would still apply, and states remain free to keep or impose their own bans.
The legal route out of the shadows runs through a licensed, bonded distillery, and some old moonshining families have already taken it. The Neeley family of Owsley County, Kentucky, traces its distilling back roughly 11 generations to James Neeley around 1740, and for most of that time the whiskey went untaxed. In 2015, Roy Neeley and his son Royce opened a fully licensed distillery in Sparta, Kentucky, which now displays vintage moonshine stills alongside its bourbon.
What the Supreme Court Decides, and What It Leaves to Others
The justices are likely to hear argument in the new year and rule before the term ends next summer. Their decision will reach well beyond whiskey, because it will test how far the Necessary and Proper Clause stretches when Congress protects a tax by forbidding the activity that would produce it.
For drinkers and craft producers, the practical stakes are narrower than the constitutional ones. A win for the hobbyists would remove one location rule and could push Congress or the bureau toward a licensing system for very small stills, possibly along the lines of the capacity tax proposed in 1867. A win for the government would confirm that a Reconstruction tax measure still governs the American garage.
Either way, the bureau and the states would keep the keys to legal whiskey, and the Supreme Court is deciding only whether Washington may lock the kitchen door as well.
