As discussed in a summer 2024 WLF Legal Pulse post, Last Call for Laws Labeling Home Distillers as Criminals?, anyone in America can lawfully produce beer or wine for home consumption, but because of two 150 year-old laws, no one can distill that beer or wine into a distilled spirit, i.e., liquor, at home. Those laws criminalize home distilling. On July 10, 2024, a federal district court in Texas held those laws unconstitutional (Hobby Distillers Ass’n v. TTB). The government appealed and on April 10, 2026, the U.S. Court of Appeals for the Fifth Circuit unanimously affirmed the hobbyists’ victory (McNutt v. U.S. Department of Justice).

Two sections of an 1868 distilled-spirits excise-tax law criminalizes the placement of distilling equipment “in any house, in any shed, yard, or enclosure connected with any dwelling house.” The home-distilling enthusiasts argue that the sections violate two important constitutional limitations on the power of Congress. The criminal provisions, they assert, exceed Congress’s power to tax and violates the Constitution’s Necessary and Proper Clause.

In an opinion by Judge Edith Jones, the panel concluded that the sections exceed Congress’s taxing power and they are neither necessary nor proper vehicles for executing that power.

Taxes Produce Revenue, Not Reduce It

In a typically textual analysis, Judge Jones explains that the power to “lay and collect Taxes” means Congress can seek money from taxpayers for the government’s use. Congress can utilize this power in a regulatory fashion, she continues, but, quoting the Supreme Court’s NFIB v. Sebelius, “the power to tax is not the power to destroy.” Those subject to a tax must have the “lawful choice to do or not do a certain act,” as long as they pay the tax.

The tax-law sections at issue not only fail to raise revenue, Judge Jones concludes, they “reduce revenue instead of raising it.” The sections prevent home distillers from purchasing taxable stills and other equipment to place in their homes or yards or sheds. The government argues that the home-distilling prohibition prevents tax evasion. That cannot be a constitutionally legitimate use of the taxation power, the court responded, because “preventing activity lest it give rise to tax evasion places no limit whatsoever” on that power.

Neither Necessary Nor Proper

Judge Jones kicks off the Necessary-and-Proper analysis in a manner that didn’t bode well for the government. Quoting the Supreme Court’s Printz v. United States, she writes, “That clause has been characterized as ‘the last, best hope of those who defend ultra vires congressional action.” Citing to foundational documents, she added that the clause “grants no new power to Congress.”

For a congressional action to be necessary, Supreme Court precedents say it must beplainly adapted to accomplish Congress’s goal. The sections criminalizing home distilling, the court reasons, are the antithesis of plainly adapted. They reduce revenue rather than raise it.

For what is considered a proper use of Article I authority, Judge Jones examines The Federalist Papers (Publius, a.k.a. Alexander Hamilton), McCulloch v. Maryland, and respected legal commentary. Most relevant to this case, a law is not “proper” if it would infringe on state sovereignty. “Without a plain connection to the exercise of Congress’s taxation power,” the court holds, Congress has “‘improperly’ . . . invaded the reserved police and regulatory power of the states.” There is no logical limitation to what types of home-business activity Congress could prohibit under the guise of battling tax avoidance, Judge Jones warns. “Home based businesses may be forbidden. Remote work may be deemed a crime.”

Addendum, April 22: Not long after we published this post, on April 22 the Sixth Circuit released an opinion in Ream v. U.S. Department of Treasury, a second, separate challenge to the criminalization of home distilling. Contrary to the Fifth Circuit, the Sixth Circuit panel held that the two sections in the tax law were necessary and proper uses of a constitutional application of Congress’s power to tax. That decision sets up a direct split in the federal circuits and could lead to petitions for Supreme Court review.