{"id":123,"date":"2026-05-27T12:10:01","date_gmt":"2026-05-27T12:10:01","guid":{"rendered":"https:\/\/pioneerrelocationnews.com\/?p=123"},"modified":"2026-05-27T12:10:01","modified_gmt":"2026-05-27T12:10:01","slug":"high-liquor-taxes-and-a-home-distillation-ban-guarantee-a-thriving-booze-black-market","status":"publish","type":"post","link":"https:\/\/pioneerrelocationnews.com\/?p=123","title":{"rendered":"High Liquor Taxes and a Home Distillation Ban Guarantee a Thriving Booze Black Market"},"content":{"rendered":"<div>\n<p>In January, police in Alabama arrested a Florida man (yeah, that guy) for allegedly transporting 81 gallons of moonshine. He certainly isn&#8217;t the only player in that business. Bootlegging has a long and storied history in the United States. In a country that has a love\/hate\/really love relationship with alcoholic beverages, innovative entrepreneurs seeking to evade high taxes on distilled spirits illegally manufacture the stuff for sale, and the authorities justify a ban on home distillation in the name of collecting those taxes. People also smuggle from low-tax to high-tax states. The result is a game of cat-and-mouse that gave us legendary figures. It even inspired customized smuggling vehicles that inspired NASCAR racing.<\/p>\n<p>Read more <a href=\"https:\/\/pioneerrelocationnews.com\/?p=121\">France Is Banning Zyn and Threatening To Jail People for 5 Years<\/a><\/p>\n<div>\n<div>\n<p><strong>You are reading <em>The Rattler<\/em> from J.D. Tuccille and <i>Reason<\/i>. Get more of J.D.&#8217;s commentary on government overreach and threats to everyday liberty.<\/strong><\/p>\n<\/div>\n<form>\n<div><\/div>\n<div>\n<div>\n<div><label>Facebook<\/label><\/p>\n<div><\/div>\n<div>This field is for validation purposes and should be left unchanged.<\/div>\n<\/div>\n<div><label>Email<span><span>(Required)<\/span><\/span><\/label><\/p>\n<div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div> <button>SUBSCRIBE<\/button>\n<\/div>\n<\/form>\n<\/div>\n<p><iframe id=\"gform_ajax_frame_19\" name=\"gform_ajax_frame_19\" src=\"about:blank\" style=\"display:none;width:0px;height:0px;\" title=\"This iframe contains the logic required to handle Ajax powered Gravity Forms.\"><\/iframe><\/p>\n<h1>A Federal Ban Driven by Perverse Tax Reasoning<\/h1>\n<p>&#8220;Federal law strictly prohibits individuals from producing distilled spirits at home,&#8221; according to the Alcohol and Tobacco Tax and Trade Bureau (yes, this is separate from the Bureau of Alcohol, Tobacco, Firearms, and Explosives, because why wouldn&#8217;t there be multiple federal agencies with overlapping jurisdiction?). &#8220;Producing distilled spirits at any place other than a TTB-qualified distilled spirits plant can expose you to Federal charges for serious offenses and lead to consequences including, but not necessarily limited to\u2026up to 5 years in prison, a fine of up to $10,000, or both, for each offense.&#8221;<\/p>\n<p>TTB is part of the Department of the Treasury and primarily tasked with filling federal coffers. But the colorful and high-stakes game between bootleggers and tax collectors really stifles the flow of money that government officials use to justify restrictive laws. As the U.S. Court of Appeals for the 5th Circuit ruled in  in April, the federal government bases the home-distillation ban on its taxing power, but the legal provisions imposing prohibition with stiff penalties &#8220;exceed these constitutional limits. Primarily, neither provision raises revenue. Not only do they prohibit at-home distilleries, but in so doing, they amount to an antirevenue provision that prevents distilled spirits from coming into existence\u2026.The provisions operate to <em>reduce<\/em> revenue instead of raising it.&#8221;<\/p>\n<p>To be clear, there would be good reasons to distill and sell moonshine even if home distillation were legal. The taxes mentioned above are insanely high. Outright federal prohibition and sky-high state excise taxes arrive at the same destination from different directions; both encourage illegal activity.<\/p>\n<h1>An Illegal Industry Inspired by Strict Laws and High Taxes<\/h1>\n<p>&#8220;Generally, distilled spirits suffer the stiffest tax rates of all alcoholic beverages,&#8221; Jacob Macumber-Rosin and Adam Hoffer reported last week for the Tax Foundation. Beer and wine are taxed, but at lower rates than distilled spirits relative to alcohol content. Also, 17 state governments in &#8220;control&#8221; states impose a government monopoly on liquor sales, which lets them hike prices beyond those that would be set in a competitive market. Unsurprisingly, control states also tend to have higher excise taxes than states with competitive markets, although Wyoming and New Hampshire are exceptions where government revenues depend on liquor sales rather than high taxes.<\/p>\n<p>Tax rates vary widely among states. Washington has the highest excise tax at $36.68 per gallon, followed by Oregon at $23.74 per gallon. Wyoming and New Hampshire, where state officials profit from their monopoly, impose effective excise tax rates of zero. Missouri charges $2.00 per gallon.<\/p>\n<p>Excise taxes aren&#8217;t the end of state impositions, though. Various governments impose case and bottle fees, sales taxes specific to liquor, wholesale taxes, and license fees for retailers and distributors. High taxes create incentives to illegally manufacture alcohol for sale at prices that beat the legal stuff. Significant differences between state levies also push people to purchase booze in low-tax states and illegally resell it in high-tax states, paralleling the thriving black market in tobacco.<\/p>\n<p>Read more <a href=\"https:\/\/pioneerrelocationnews.com\/?p=119\">Why Has Trump Stopped Selling Weapons to Taiwan?<\/a><\/p>\n<p>&#8220;Just as with cigarettes, significant differentials in tax burdens between nearby jurisdictions incentivize cross-border trade and smuggling,&#8221; add Macumber-Rosin and Hoffer. &#8220;For instance, residents of Washington, the state with the highest spirits taxes, are estimated to account for 8 percent of purchases in Idaho, a neighboring control state with a lower effective tax burden (though still the 9th highest in the country). That 8 percent of purchases amounts to approximately $25.3 million in sales.&#8221;<\/p>\n<p>That&#8217;s before we even talk about the federal excise tax. &#8220;The first 100,000 proof gallons of distilled spirits manufactured in America per calendar year are taxed at a reduced rate of $2.70 per proof gallon, which would be $1.08 per gallon of 40 percent ABV [alcohol by volume] spirits,&#8221; note Macumber-Rosin and Hoffer. &#8220;The next 22.13 million proof gallons manufactured in America per calendar year are taxed at $13.34 per proof gallon ($5.34 per gallon of 40 percent ABV spirits). Any additional spirits manufactured in America and all spirits imported into the country are taxed at the general rate of $13.50 per proof gallon ($5.40 per gallon of 40 percent ABV spirits).&#8221;<\/p>\n<h1>Taxes Are Half the Price of a Bottle of Booze<\/h1>\n<p>Added all together, taxes make up about half the price of a typical bottle of liquor. &#8220;When you factor in federal, state and local taxes, more than 52% of the price of a typical bottle of spirits goes toward a tax of some kind,&#8221; according to the Distilled Spirits Council of the United States, an industry trade group.<\/p>\n<p>No wonder bootlegging plays such a large cultural role in the U.S., with cars modified for the purpose decades after Prohibition was repealed. And no wonder Alabama cops are still pulling over vehicles full of moonshine. The opportunity to make a buck by illegally manufacturing moonshine, or by smuggling legally produced liquor from a low-tax to a high-tax jurisdiction for resale, is guaranteed to tempt many people.<\/p>\n<p>For the same reason, home distillation has the potential to really take off as a hobby if the Fifth Circuit Court&#8217;s reasoning prevails when the issue arrives before the U.S. Supreme Court. If, on the other hand, the Sixth Circuit&#8217;s contrary conclusion that &#8220;the home-distilling ban was lawful when enacted, and remains so today&#8221; in  wins in the high court, home distillation won&#8217;t receive the boost of legality, though it will continue the growth in popularity it has enjoyed in recent years. <em>Reason<\/em>&#8216;s Jacob Sullum recently addressed the tension between the decisions.<\/p>\n<p>Ultimately, though, federal and state officials have created the perfect conditions to encourage an illegal market in distilled spirits. Between the ban on home distillation, which dates to 1868, and high federal and state liquor taxes, they&#8217;ve extended an invitation to anybody with an adventurous streak to manufacture their own booze, and to sell it to others to make a buck.<\/p>\n<p>You don&#8217;t have to be from Florida to see the attraction of trying out your own liquor recipes or filling a car with whiskey in one state and driving it to another. Americans have been doing that for decades, and as\u00a0long as high taxes make it lucrative, they will continue to do so\u2014no matter which way the courts decide.<\/p>\n<p>Read more <a href=\"https:\/\/pioneerrelocationnews.com\/?p=117\">A Reprieve for Build-To-Rent<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Between a home distillation ban and high liquor taxes, government officials have created the perfect conditions for a black market in distilled spirits.<\/p>\n","protected":false},"author":1,"featured_media":122,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"class_list":["post-123","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-liquor"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>High Liquor Taxes and a Home Distillation Ban Guarantee a Thriving Booze Black Market - 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