While home brewing and home wine making are on the rise and finding more receptive lawmakers across the country, home distilling is still illegal. It is illegal under federal law, mirror-restricted in the states, and unlikely to be altered or amended anytime soon.
What is Distilling?
Distilling spirits is the process of refining alcohol. It is based upon the very basic process of fractional distillation–using a difference in boiling points to separate the alcohol from the water–to create a highly concentrated version of the original alcohol. It uses a “still” – an apparatus capable of being used for separating alcohol, or alcoholic vapors or solutions from alcohol or alcoholic solutions or mixtures.
- One first must make the alcohol. This involves mixing yeast, water, and sugar (or a sugar-containing grain) in a fermenter. After three to seven days of voracious fermenting, the yeast has consumed most of the sugar, turning the mash into a “wash” (10 or 12 percent alcohol by volume). A pump moves the wash into the pot of the still.
- A boiler then pumps steam into a jacket, or two-walled metal sleeve, that surrounds the bottom of the pot of the still. The heat builds for a half-hour or so to raise the “wash” to its boiling points—plural. Ethanol boils at 173 degrees F and water boils at 212 degrees F.
- As the blended alcohol and water vapor rises from the pot, it enters a cool chamber – the copper column. Most of the vapor condenses and falls back into the pot. But flat copper condensing plates can span the column, controlling the pace of the process (and the taste of the product). The vapor with the highest alcohol content, and thus the lowest boiling point, continues to the outlet at the top of the column.
- The concentrated alcohol vapor enters a horizontal pipe called a lyne arm. Vapor in the lyne arm flows into a vertical chamber, where a pipe of cool water surrounds a pipe of alcohol vapor. As vapor cools, it condenses into liquid ethanol, which drips from the condenser into a collection vessel.
- The first 5 percent of the “run,” a/k/a the “foreshots” or “heads,” contains large amounts of cogeners, or volatile chemical compounds such as acetone, aldehydes, esters, and fusel oils. Next comes the “hearts,” the high-proof alcohol base. The last bit, the “tails,” is a low-proof mix often set aside and re-distilled later.
- Distillers mix the hearts with small quantities of heads, and the blend is diluted and aged to make spirits. With too high a percentage of cogeners, the drink tastes rough; with too little, it’s bland.
The clear liquid emerging from the still is called “moonshine,” “white dog,” or “white lightning.” It is colorless and harsh. But if placed into storage containers to age, it will take on added complexity. After a few years in barrels, it takes on color, richness, and complexity of flavor. The type of grain and storage container used, contributes to the finishing flavor (e.g. Bourbon is aged in new but charred oak barrels; Scotch resides in old bourbon barrels; Irish whiskey ages in used sherry casks.)
Federal Requirements
Specifically, you cannot produce spirits for beverage purposes without paying taxes and without prior approval of paperwork to operate a distilled spirits plant. And there are numerous requirements that must be met that make it impractical to for a hobbyist to receive a license as a distilled spirits plant, solely to produce spirits for personal or beverage use. Some of these requirements are paying excise tax, filing an extensive application, filing a bond, providing adequate equipment to measure spirits, providing suitable tanks and pipelines, providing a separate building (other than a dwelling) and maintaining detailed records, and filing reports. All of these requirements are listed in 27 Code of Federal Regulations, Part 19.
And there are significant consequences for “moonshining.” Producing distilled spirits at any place other than a U.S. Department of Treasury, Alcohol and Tobacco Tax and Trade Bureau (TTB) qualified distilled spirits plant can expose you to Federal charges for serious offenses and lead to consequences including, but not necessarily limited to, the following:
- Within title 26 of the United States Code, section 5601 sets out criminal penalties for activities including the following. Offenses under this section are felonies that are punishable by up to 5 years in prison, a fine of up to $10,000, or both, for each offense.
- § 5601(a)(1) – Possession of an unregistered still.
- § 5601(a)(2) – Engaging in business as a distiller without filing an application and receiving notice of registration.
- § 5601(a)(6) – Distilling on a prohibited premises. (Under 26 U.S.C., § 5178(a)(1)(B), a distilled spirits plant may not be located in a residence or in sheds, yards, or enclosures connected to a residence.)
- § 5601(a)(7) – Unlawful production or use of material fit for production of distilled spirits.
- § 5601(a)(8) – Unlawful production of distilled spirits.
- § 5601(a)(11) – Purchase, receipt, and/or processing of distilled spirits when the person who does so knows or has reasonable grounds to believe that Federal excise tax has not been paid on the spirits.
- § 5601(a)(12) – Removal or concealment of distilled spirits on which tax has not been paid.
- Under 26 U.S.C., § 5602, engaging in business as a distiller with intent to defraud the United States of tax is a felony punishable by up to 5 years in prison, a fine of up to $10,000, or both.
- Under 26 U.S.C., § 5604(a)(1), transporting, possessing, buying, selling, or transferring any distilled spirit unless the container bears the closure required by 26 U.S.C., § 5301(d) (i.e., a closure that must be broken in order to open the container) is a felony punishable by up to 5 years in prison, a fine of up to $10,000, or both, for each offense.
- Under 26 U.S.C., § 5613, all distilled spirits not closed, marked, and branded as required by law and the TTB regulations shall be forfeited to the United States. In addition, 26 U.S.C., § 5615(1) provides that unregistered stills and/or distilling apparatus also will be forfeited.
- Under 26 U.S.C., § 5615(3), whenever any person carries on the business of a distiller without having given the required bond or with the intent to defraud the United States of tax on distilled spirits, the personal property of that person located in the distillery, and that person’s interest in the tract of land on which the still is located, shall be forfeited to the United States.
- Under 26 U.S.C., § 5686, possessing liquor or property intended to be used in violation of the law is a misdemeanor punishable by up to 1 year in prison, a fine of up to $5,000, or both. Such liquor and property is also subject to the seizure and forfeiture provisions in 26 U.S.C., § 5688.
- Under 26 U.S.C. 7201, any person who willfully attempts to evade or defeat any Internal Revenue Code tax (including the tax on distilled spirits) has committed a felony and shall be fined up to $100,000, imprisoned for up to 5 years, or both, plus the cost of prosecution.
- Under 26 U.S.C., § 7301, any property subject to tax, or raw materials and/or equipment for the production of such property, in the possession of any person for the purpose of being sold or removed in violation of the internal revenue laws may be seized and shall be forfeited to the United States. In addition, any property (including aircraft, vehicles, and vessels) used to transport or used as a container for such property or materials may be seized and shall be forfeited to the United States. Further, 26 U.S.C., § 7302 adds that it is unlawful to possess any property intended for use, or which has been used, in violation of the internal revenue laws; no property rights shall exist in any such property.
As the still is the key component of distilling, as you can see, most of the prohibitions are tied to the use or possession of an unregistered still. Thus, merely possessing an unregistered still puts you in the cross-hairs of at least a half-dozen federal felonies.
California Requirements
Personal use and ownership of a still is illegal under California law. Rather, in conjunction with registering on the federal level, an owner of a still must also acquire an appropriate business license for the use of the still. This is the case in almost all of the states.
Specifically, in California, you are required to obtain a license from the Department of Alcoholic Beverage Control for mere possession of the still. But that license will only be issued in conjunction with acquiring an appropriate license for the use of the still – either a Distilled Spirits Manufacturer, Distilled Spirits Manufacturer Agent, or a Craft Distiller license. Those licenses are all separate and distinct, and cannot be held all by a single person or entity:
- Distilled Spirits Manufacturer – License Type 4. This is the original distilling license. The functions of this type of license, in addition to that of unlimited production, include packaging, bottling, rectifying, flavoring, of their own-produced or other distilled spirits. It does not include the production, packaging, bottling, rectifying, or flavoring of beer or wine. On-site tastings are permitted – of both that which was distilled by the licensee or others.
- Distilled Spirits Manufacturer Agent – License Type 5. It permits the license holder to possess and export distilled spirits, as well as package, sell, or deliver distilled spirits to other manufacturers. rectifiers, or wholesalers of distilled spirts. It also permits the license holder to participate in the cutting, blending, mixing, flavoring, or coloring process of distilled spirits.
- Craft Distiller – License Type 74. It permits a license holder to produce up to 100,000 gallons of distilled spirits annually. It also allows distilleries to sell up to three 750-ml bottles per customer per day on site and to open an on-site bar or restaurant and have tastings where they can make cocktails and mixed drinks. However, they are limited to only using the distilled spirits that they produced.
The original application fee and annual fee thereafter are the same for each license type.
Local Government Requirements
Furthermore, there will likely be further permitting or licensing requirements with your local municipality. Undoubtedly, you will be required to obtain a license to operate a business and you may be required to obtain a Conditional Use Permit (“CUP”). Whether or not a CUP, or other type of use permit or business license, is required (and whether it is necessary for a new business or an existing business that now has expanded privileges under this new license) is determined by the local jurisdiction in which the business is located.