"That seems to be the one card that always gets pulled when it comes to distilling, the money card. As far as the feds go, I'm legal. I can legally produce and distill 10,000 proof gallons of alcohol per calender year. No bond required with a small AFP. The amount of money needed and red tape you have to go through just to change from an AFP to a DSP (distilled spirits producer) is unreal. The VABC basically requires the same thing along with an inspection of your equipment and you have to put a public announcement out stating that you've applied for a VABC Distiller's license. After speaking with the VABC and Federal agents and doing some research, the cheapest way to go is an AFP. The cheapest that I've seen for a micro distillery was in NY and he spent well over $18K just for NY alone. The Federal tax rate for a gallon of spirits is $13.50 per gallon. By the time I factor in the state's taxes, this total jumps to just under $30 bucks per gallon. So lets do some math here. Let's say you produced 100 gallons of top notch spirits:

$30.00 bucks X 100 gallons = $3,000 bucks

^ That's just in taxes. This does not include your operating costs and for some of the items, additional taxes also get collected for both the state and federal governments. Now this is just for one state, If your stuff is being produced and sold legally in another state, then you'll be paying that state's alcohol taxes. So let's do some more basic math:

100 gallons per state X 50 states = 5,000 gallons.

5,000 gallons X $30.00 bucks per gallon = $150K

^ That's just with one micro distillery. Now how many micro distilleries are in this country? This is why home distilling may never be fully legalized. Sure they'll make it easier to obtain the proper licensing and what not, but not everyone can afford to buy the license. The VABC distiller's license is $450.00 bucks as long as you don't go over 5,000 gallons. If you plan on distilling more than that, then the license jumps to $3,725 bucks. It's best just to get an AFP and do small batches. Do not tell and do not sell and you should be fine."

Sort of. In terms of getting home distilling legalized completely and dealing with the politicians, then VA is a lost cause. Both Alli and I have tried and pretty much got no where. However it's not impossible to spend money to get the proper licensing which I'm in the process of doing. That's my goal and my dream. To be a licensed micro distiller for the state of VA only. I've already got the federal license. I'm now in the process of getting a VABC license. My federal license number is in my signature.

I'm only allowed to make it for fuel purposes only. I am not allowed to sell it without additional licensing. An AFP (or alcohol fuel producer) license is really easy to get and it's free. With the small level, there's no bond requirements. When I first started looking into getting this federal license back in 2006, that was a different story. Now they have a long and involved process just on submitting a sample for lab testing which is required for a DSP (or distilled spirits producer). They also have 3 different versions of the DSP. The first is DSP: industrial which just about the same as what I have plus a little bit more privelages that go with it. The next is DSP: Beverage which pretty much is self explanatory. The next version is DSP: Industrial/Beverage which means you can distilling anything you want legally.

This is interesting ... and I've been thinking about it a lot lately ... especially with the legalized marijuana in CO.

My biggest concern, from an enforcement point of view, are the feds. They're the ones that have the lists. And in the current federal political environment, our federal government seems more than willing to use strong-arm tactics.

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At the state/local level, at least from all the articles I've read, it appears that the concern is with illegal sales (i.e. - the type of idiots we see on TV with 600 gallon stills) ... not the hobbyists. Many of the articles also mention grow operations, drug possession/sales, etc. That is, other illegal activities that perhaps are responsible for raising the flag.

Our ranks comprise tradesmen, doctors, lawyers, engineers ... and yes, even state/local law enforcement personnel. So it doesn't seem to me that the state/local enforcement folks really care about the folks that make a few liters here and there for their own use.
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Anyway, it doesn't appear that the feds have the will to claim enforcement jurisdication over the states where the laws are in conflict. I would expect the battles to be waged between state & federal politicians and in the courts rather than in the field. So I wonder if approaching state representatives could gain some momentum towards legalization. Maybe it's worth a shot? It might be just the thing that a certain type of politician would support ... if for no other reason than to assert state sovereignty and shoot the finger at the feds. It seems to be working well in Colorado.

John,
After looking at the websites of every state's liquor control department, I can tell you that many states have dozens and dozens of license types and each license type has its own set of rules and regulations. Keeping up with the licenses of all the liquor stores, grocery stores, drug stores, gas stations, convenience stores, restaurants and beer joints is no easy task. State taxes may come under the liquor control folks or it may be the responsibility of the state revenue dept. It seems to me that the states are more concerned about underage sales than the distilling a few gallons of booze by an adult.

I am interested in what laws you are referring to when you say state and federal laws are in conflict. The TTB is interested in collecting taxes. The states have a myriad of liquor laws to enforce plus taxes to collect. I can't find the conflict.

Tom

"Hi Alli,


I was referring to laws like the ones in Colorado. Marijuana production, use, possession etc. is illegal from the federal perspective. Colorado, however has legalized it. So the federal law and state law are in conflict. What I find interesting is that the feds apparently don't have the will to enforce federal law within the state of Colorado. And with good reason ... could you imagine what would happen if the feds attempted to go into Colorado and carry out enforcement activities with respect to marijuana ... it would be an unprecedented preemption of state authority. I would think that it would be political suicide.

So my point is that the idea of needing federal legalization may be an artificial constraint we've placed on ourselves ... perhaps we should be looking more closely at making inroads at the state level.

--JB"

Gentlemen.. The Feds did make an attempt at enforcement in California at one time when the dispensaries got a bit too loose...Didn't work out too well.

But the point is well taken, JB, on a number of fronts where selective enforcement is the norm with this administration.

Knightmare,
TTB form 5100.51 is not required at this time, but probably will be at some future date. It primarily deals with imports, wine, spirits where additives are included such as coloring, flavoring, etc. I think you are getting the cart way up in front of the horse. Get your permit, open your business, develop your products and then worry about TTB form 5100.51. Unfortunately the only people you can sell your products to in VA are the state liquor stores.

Before I forget, I did meet these guys yesterday at the Ole Smoky TN Moonshine Distillery in Gatlinburg, TN:



The dog Cutie Pie was and is an awesome dog.