Supreme Court to decide legality of ban on distilling liquor at home

Washington — The Supreme Court on Monday said it will consider the constitutionality of a nearly 160-year-old federal ban on distilling liquor at home.

Arguments in the case, known as Department of Justice v. McNutt, will likely take place next year, with a decision coming by late June or early July.

For more than a century, Congress has limited the location of distilling to prevent tax evasion. Under the law at issue in the case, enacted in 1868, a “person may not produce distilled spirits at home for personal use.” Any person who uses or possesses stills or other equipment to produce distilled spirits in “any dwelling house” or shed, yard or enclosure faces criminal penalties.

Violators face fines and up to five years in prison. The violator’s home and property within it are also subject to forfeiture.

Congress approved the restrictions after determining that there was rampant tax evasion by commercial distillers. At that time, the tax rate for spirits was $2 per gallon, more than their market price, and commercial distillers found it cheaper to bribe revenue officers than pay the tax, according to a House report from 1867. Lawmakers determined that “at least seven-eights” of spirits went untaxed at the time.

The legislation that ultimately would prohibit home distilling cut the tax rate and required the duties to be paid before the spirits were removed from warehouses. There are no exceptions for distilled spirits made for personal or family use.

The dispute over the longstanding ban on home distilling was brought by the Hobby Distillers Association and one of its members, who wants to distill spirits at his home and argued that the home-distilling prohibition exceeded Congress’ enumerated powers, including its taxing power. A federal district court sided with the plaintiffs and found the ban unconstitutional. 

The location restrictions enacted by Congress in the 1800s “criminalize conduct of persons not subject to the tax” and don’t “touch the product to be taxed,” the district court said.

The U.S. Court of Appeals for the 5th Circuit then upheld most of that decision and said that the limits on home distilling are not “plainly adapted” to support the government’s taxing power, since the restrictions reduce revenue by barring people from making distilled spirits that could be taxed.

The 5th Circuit said that upholding the ban would let Congress “criminalize nearly any at-home conduct only because it has the possibility of concealing taxable activity.” 

In urging the Supreme Court to take up the case, Solicitor General D. John Sauer argued that the lower court decision striking down the ban is “erroneous.”

Congress, he wrote in the appeal, restricted home distilling “because a distiller can more easily conceal a distilling operation or thwart necessary inspections — thereby evading the requisite tax — if the still is located in a dwelling-house or connected structure.”

Lawyers for the would-be distillers agreed that the Supreme Court should step in and decide the constitutionality of the ban, which they said exceeds Congress’s power under the Taxation and Necessary and Proper Clauses of the Constitution.

They warned in court papers that “there is no limit to the government’s claim of power to criminalize local conduct that might conceal taxable activity.”