Why It Matters

The Fifth Circuit held that an at-home spirit distilling ban violates the Taxing Clause, according to a recent Congressional Service Report, published July 27. Since the provisions do not raise revenue but instead, reduce it by prohibiting taxable activity, it violates both the Taxing Clause and Necessary and Proper Clause. The circuit split creates legal uncertainty where the same federal statutes are enforceable in some states, but enjoined in others.

The Big Picture

The at-home spirit distilling ban dates to 1868, when Congress enacted it as part of a sweeping effort to combat rampant tax evasion on distilled spirits. The original law prohibited individuals from producing spirits at home for personal consumption and attached felony criminal penalties to violations. Today, the same restrictions remain in the Internal Revenue Code, with the Alcohol and Tobacco Tax and Trade Bureau enforcing them.

The constitutional challenge in McNutt v. U.S. Department of Justice centers on whether Congress had the power to impose this outright ban.

The court reasoned that the at-home distilling ban was inconsistent with the Supreme Court's understanding of Congress's taxing power, which held that a tax must leave an individual with a lawful choice to do or not do a certain act. The court also concluded that even if the ban could be deemed necessary to prevent tax evasion, it is not proper because it punishes individuals Congress cannot otherwise reach.

The ban criminalizes conduct rather than giving individuals a lawful choice to pay a tax, the court found, and improperly encroaches on states' reserved police powers.

Political Stakes

For Congress

The Sixth Circuit, in a separate 2026 case, upheld the at-home distilling ban on the grounds that it was a lawful exercise of Congress's authority under the Necessary and Proper Clause. However, the Fifth Circuit's reasoning represents a potential redrawing of constitutional limits on federal power with consequences well beyond distilling.

The circuit split creates legal uncertainty where the same federal statutes are enforceable in some states but enjoined in others.

The Bottom Line

The Fifth Circuit's decision that the at-home spirit distilling ban violates the Taxing Clause and Necessary and Proper Clause is a significant constitutional constraint on federal power. The real stakes lie in how the Supreme Court resolves this tension, and whether the Fifth Circuit's reasoning extends to other federal criminal statutes.

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