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The Injunction Now In Effect
Jul
Amazing news for hobby distillers in the United States!
By now you surely know that the Hobby Distillers Association won their lawsuit against the United States Government and the Alcohol and Tobacco Tax and Trade Bureau. This was a HUGE win, and by far the furthest our movement has ever gotten. So, take a celebratory drink (of legally acquired spirts), and say a toast to the Competitive Enterprise Institute– their lawyers helped make this happen!
What does this actually mean? Can I get a still and start making my own spirits?
Not so fast! While this was a tremendous move in the right direction for hobby distilling, it is not as straightforward as that. To simplify things, here are the important takeaways in point form:
- First, this only covers the plaintiffs in the case. Those are one individual (Scott McNutt), and the Hobby Distillers Association. As the HDA is a member organization that advocates for legalizing hobby distilling, the members are included. This means that you are only protected by the injunction if you are a member of the HDA. We have been asked if the free ‘Supporter’ option creates a membership, but as noted on our website, that is a non-member level- a show of support for the effort.
- The injunction does not mean that you cannot be charged for distilling at home! The injunction simply means that you cannot be denied a DSP (Distilled Spirits Plant) permit simply because you wish to set up at home. You still must apply for the permit and abide by all rules that a regular DSP does.
Doesn’t that mean this ruling is useless to me?
Not at all!. What it means is that you now have the ability to obtain a permit to distill at home (assuming your state allows it). Yes, you will need to file paperwork and pay the excise tax (currently $14 per proof gallon, or approximately $2.80 per 750ml bottle at 100 proof), but you can now do this. You never had the option to before!
In addition, as a small producer (less than $1000 in excise tax per year) you should be able to defer payment to the end of the year instead of having to make payment every time you produce. You also should not require a bond, simplifying the process.
In other words, the order of operations for those who want to distill at home legally is (1) make sure you are a member of the HDA, (2) apply for the federal permit, (3) receive the federal permit, and (4) comply with all state-level rules (which may include such things as receiving a state permit).
Will it ever get easier, or is this it?
Right now we are thrilled with this win, however, our long-term goal is still to get hobby distilling the same legal standing as home brewing and home winemaking, which have been legal for decades. If this ruling stands (more on that below), then we feel that, once things calm down and the government and industry see that it is not causing a problem with health and safety, or a drop in revenue for the commercial distilling industry, they will be much more accepting of full-fledged legalization, just like home brewing and home winemaking. The HDA plans to pursue that as a second step, as well as legalization for those states that have not already adopted it.
What do you mean “if this ruling stands”?
The government has 60 days from the original ruling to appeal. There was a 14 day stay to allow the government to file an emergency appeal and request the stay be held until a final ruling is made. The 14 days expired, so HDA members can now apply for a DSP permit (link below) and cannot be refused simply based on location. If you wish to apply please be sure to have the paperwork all in proper order! The TTB is not out to refuse you, and they are reasonable to work with, but they also have a job to do, so they will not approve a permit that is not properly filed. They can get irritated with an influx of incorrectly completed paperwork, however, and that is not unreasonable. From our experience, complete their forms correctly and be polite and they will reciprocate.
If the government chooses to appeal the decision (which is expected), then our lawsuit goes to the Fifth Circuit Court of Appeals. We hope that, should they appeal, the appellate judges on the Fifth Circuit will also find in our favor. We will obviously keep you updated on this.
What if they win their appeal?
Either party can request an appeal of the next decision, and hope that the Supreme Court will take the case, but let’s not get ahead of ourselves. Know that the HDA will continue the legalization effort, but we cannot yet see what direction that will be. Please continue to support the Hobby Distillers Association, and ask your family and friends to, as well. We will need all the support we can get to see this effort through, and to get hobby distilling legal throughout the United States!
What can I do to help make our case as strong as possible?
If possible, we would like you to inform us when you apply for a federal permit, and let us know of any problems, delays, or issues if there are any. We will keep track of this information and share it with CEI’s lawyers if there is future litigation. This information could be very helpful going forward. Remember, you are not doing anything wrong by applying for a federal permit! This actually shows that you are doing everything the right way to stay within the law.
Requirements for submitting a registration to the TTB: Click Here
Bond Requirements: Click Here
Lock Requirements for a DSP: Click Here
TTB Portal for submitting permit applications: Click Here
More information about the Competitive Enterprise Institute: Click Here
This is awesome!!!! Keep going HDA!!!!
I just applied for my yearly membership so I could be involved in the court battle with HDA and give a little help. If possible could you let me know if it is possible to apply for a Federal Permit in Pennsylvania for home distilling? Thank you and good luck with the court fight.
You can certainly apply for the federal permit. I am not sure about the state rules for PA, but we are working on getting updated laws for each state compiled and will then upload them to the website. As you can imagine, this is quite an undertaking, but we are making progress. I do not believe that PA has specifically allowed for distilling at home, but there are several states that follow the federal law, so it is possible that PA falls into this group, or simply has nothing on the books either way.
The TTB still states that you may not make the spirits for t your own or family consumption. So I’m assuming after paying for the gallon tax, you’ll have to document your sale of the gallon and pay the subsequent income tax. Is this correct?
Keep in mind that this is all new, and the TTB has not updated their website or forms. As it was explained to me, there is no sale of the spirits required under the permit. The TTB is only interested in collecting the excise tax on the spirits. As long as you pay the tax, they could care less if you pour the spirits down the drain.
There may also be state laws that you must consider, depending on the state that you are located in. We are still working on getting the state laws researched and posted, but as you can imagine, that is a huge undertaking.
Thank you! These baby steps are monumental compared to what’s been done over the hundred years. I believe sincerely this is going to lead to other major developments at the state level.
I’m a home distiller and I work part-time at a legal craft distillery. When I mentioned this news to my boss he said that he opposes legalized home distilling (even though he started by home distilling, himself) because he fears that people who would try their hand at home distilling, and are not knowledgeable in making cuts or possibly building a closed-system still could cause serious harm to themselves or others. He knows that I know what I’m doing when it comes to distilling, but he feels that hobbyists need to have something in place for mandatory education and still registration. Have you had similar pushback from legislators or others? What could be proposed to dispels these and other concerns?
Unfortunately, we do see pushback from those who are now commercial, but started out as hobbyists. It seems that they wanted to see the hobby legalized until they were commercial, and suddenly worry about it hurting their business. They make other excuses, though. We have tons of safety information, especially from New Zealand, where hobby distilling was legalized in 1996, showing that it is safer than even cooking on an electric stove (don’t get me started on cooking on a gas stove). The stories of poisoning are only when a spirit is adulterated with methanol (“moonshiners” sometimes do this to stretch the ethanol). There is not enough methanol produced in a fermentation to cause poisoning. It would take several batches with the methanol separated and consumed at one time to cause this. If methanol poisoning is a concern then all fruit juices need to be banned, as there is more methanol in a glass of many juices than the same amount of distilled spirits even without separating it from the collection.