The U.S. Supreme Court agreed Oct. 19 to review a federal ban on home distilling, setting up a test of how far Congress may go to protect revenue from taxes on spirits.
In Department of Justice v. McNutt, the justices will consider whether the restriction is necessary and proper to carry out Congress’ taxing power. Federal appeals courts have reached opposing conclusions on that question.
The restriction, enacted in 1868, prohibits making distilled spirits in a home or a connected shed or yard, including for personal use. A violation can carry a fine of up to $10,000 and a prison term of up to five years.
The Hobby Distillers Association and four of its members challenged the law. In April, the 5th Circuit found that the restriction exceeded Congress’ authority to support tax collection. It affirmed, as modified, an injunction against enforcing the provisions against the challengers and association members.
The 5th Circuit reasoned that a production ban also prevents people from making spirits on which taxes could be collected. In a separate case, the U.S. Court of Appeals for the 6th Circuit upheld the restriction as a measure against tax evasion.
Congress adopted the rule after widespread evasion of spirits taxes. In its Supreme Court petition, the Justice Department argued that distilling in a residence is easier to hide and harder to inspect, making the location restriction a way to safeguard tax collection. The challengers seek relief from the federal prohibition on making spirits at home.
The Supreme Court has not set a date for arguments.
