During the prohibition era, Americans operated illegal moonshine stills and produced homemade spirits in secret.
Although prohibition ended, there are still laws preventing the unregulated distillation and sale of spirits in the US.
If you want to distill liquor at home or open a small craft distillery, you can make this dream a reality, but it will take some time, money, and patience to navigate federal, state, and local requirements.
In this article, we’ll look at what it takes to legally distill liquor in the US.
Is Distillation Legal in the USA?
You can own a still of any size without any license or permits whatsoever and it is perfectly legal to distill water with it.
However, if you want to distill fuel or alcohol, you will need legal permits and licenses.
There are regulations governing the distillation of liquor and spirits in the USA that must be followed for the process to be legal. It is illegal to distill liquor or spirits in the US without an appropriate federal license, and (in most states) a state-level permit.
You’ll need to file for a federal distilled spirits permit if you want to distill liquor. There is no charge to apply, and this permit is necessary to obtain whether you want to distill spirits for your private use or start a business.
The federal permit is essentially a full background check. The federal government verifies that you are trustworthy to operate a still and that you have adequate plans in place to protect your still from fire and theft.
Some of these questions can get personal and specific. If you are a felon, you will likely be denied. You could be asked questions about your spouse and any business partners you have. If you obtained the money to start a business from a loan, you will need to provide information on your investors.
This process can be invasive and take some time, but if you are an “upstanding citizen” with clear plans about how and what you want to distill, you should make it through the process.
You can apply online for a distilled spirits permit through the Alcohol and Tobacco Tax and Trade Bureau.
Each state has its specific laws about distillation, so in most cases, it’s not enough to have a federal permit.
If you want to operate a commercial distillery, especially, you’ll need to satisfy the state requirements and apply for a state license.
The process and the regulations vary considerably between states. In Missouri, all you need is a federal license to distill at home. In Florida, you can’t even own a still without getting a state license.
Hopefully, in your state, there is a category of license for small-scale producers – a domestic or micro-distiller’s license. These are specifically intended for home distillers or the operators of small craft distilleries, and have different requirements that are more suited to individuals and small businesses.
If your state doesn’t have a domestic or micro-distiller’s license, you may need to pursue the same licensure requirements that a major international distillery would, which is a lot of red tape that is better avoided.
Research your local state laws around distillation and apply. You can find the distillation laws for all 50 states on the Tax and Trade Bureau website.
Local Authorities and Zoning
Even after you have federal and state permits, you might need to satisfy other local authorities that you are appropriately operating a legitimate distillery.
It doesn’t matter that you have a federal permit saying your distillery premises are safe from fire if the local fire Marshall disagrees.
If you are opening a small distillery, you can expect visits from zoning authorities, water management, fire marshalls, and any other local authorities that might have a say in whether or not you can operate.
The best way to navigate these loopholes is to research the local requirements in detail and be extremely friendly and compliant with the people enforcing the rules.
How much does a Distilled Spirits Permit cost in the USA?
There is no cost to apply for a federal distilled spirits permit. You can apply for free online.
At the state and local levels, the costs vary considerably. You might need several different licenses, depending on whether you are an individual distiller or running a business. If you intend on serving anything you produce, you will also need a liquor license.
The total costs of permitting to start distilling spirits are very difficult to predict and depend on the total application fees for several different licenses that are different depending on the state you live in.
How to Get a Distilling License
The process starts with getting your federal distilled spirits permit. After that, you’ll need the required state licenses and approval from local authorities and inspectors.
It’s best to pursue things in this order because you will need the federal permit to apply for the state license, and you’ll need both to deal with local authorities.
It can take anywhere from a few months to a year to get all of the paperwork together, especially if you are distilling spirits to sell and serve locally.
There is a lot of red tape surrounding distilling and selling alcohol, but it is worth it if this is your passion and your business. Distilleries may involve costs and paperwork to get started, but the craft distilling industry is growing steadily and craft distilleries have gross profit margins of 30-45%.
If your dream is to distill spirits, don’t be discouraged that it is technically illegal in the US. With a lot of patience and the right permits, you can make your dream a reality and create your own distilled spirits, whether you want to enjoy them at home or serve them commercially.