Moonshine, a spirit deeply woven into the cultural fabric of Tennessee, often raises questions about its legality. The image of illicit stills hidden in the Smoky Mountains is a powerful one, but the modern legal landscape is more complex. While the term “moonshine” traditionally refers to illegally produced, untaxed liquor, it is now possible to produce and sell a similar spirit legally within the state.
The Legal Status of Moonshine in Tennessee
In Tennessee, spirits that are colloquially called moonshine can be produced and sold legally, but this is only possible under a strict regulatory framework. The distinction lies between the historical, untaxed product and today’s commercially available, tax-paid spirits, which are often unaged whiskeys. Since 2009, state law has allowed for the legal distillation of spirits in many more counties than was previously permitted.
This shift has enabled a thriving industry of legal distilleries producing spirits they market as moonshine. The primary governing bodies are the Tennessee Alcoholic Beverage Commission (TABC) and the federal Alcohol and Tobacco Tax and Trade Bureau (TTB), which oversee everything from production to labeling and sales.
Licensing for Legal Moonshine Production
To legally manufacture spirits often referred to as moonshine in Tennessee, a prospective distiller must navigate a dual-licensing process involving both federal and state authorities. The first step is obtaining a Federal Basic Permit from the TTB. This federal application requires extensive details about the business, including ownership information, a detailed business plan, and diagrams of the proposed distillery premises.
Concurrently, an application must be submitted to the Tennessee Alcoholic Beverage Commission for a state manufacturer/distillery license. This involves a $300 application fee and a $1,000 annual license fee.1TN.gov. Fees Applicants must provide proof of U.S. citizenship, disclose all financial interests, and undergo background checks. The proposed distillery location must also comply with all local zoning laws and the specific location requirements outlined in Tennessee Code Annotated § 57-2-103.2Justia Law. Tennessee Code § 57-2-103 – Manufacturing of Intoxicating Liquors
Regulations for Selling Legal Moonshine
Once a distillery is legally licensed to produce moonshine, a separate set of regulations governs how that product can be sold. In Tennessee, a distillery license allows for the sale of its products directly to consumers from the distillery premises for both on-premise and off-premise consumption, permitting distilleries to operate tasting rooms and sell sealed bottles to visitors.
For off-premise sales at the distillery, a licensed facility can sell up to five gallons of its product to any individual of legal drinking age per visit. These retail sales are restricted to specific hours: 8:00 A.M. to 11:00 P.M., Monday through Saturday, and 10:00 A.M. to 11:00 P.M. on Sunday. Any product sold at retail, or even provided as samples, must first be obtained from a licensed wholesaler, a rule that ensures proper tax collection and tracking.
To distribute products beyond the distillery to package stores or restaurants, the manufacturer must work through Tennessee’s three-tier system, selling to a licensed wholesaler who then sells to retailers. Under Tennessee Code Annotated § 57-2-108, any spirit marketed as “Tennessee Moonshine” must be distilled in the state, or the manufacturer risks license suspension or revocation.3Justia Law. Tennessee Code § 57-2-108 – Use of Name “Tennessee Moonshine”
Consequences of Illegal Moonshine Activities
Engaging in any aspect of the moonshine trade outside of the legal, licensed system carries severe state and federal penalties. The manufacturing of intoxicating liquors without the proper state license is a Class A misdemeanor in Tennessee. Simple possession of a still or any part of an apparatus intended for manufacturing liquor is a Class B misdemeanor under Tennessee Code Annotated § 39-17-707.4Justia Law. Tennessee Code § 39-17-707 – Possession of Still
Possession of an unregistered still is a felony under 26 U.S.C. § 5601, which can result in fines up to $10,000 and up to five years in prison.5Legal Information Institute. 26 U.S. Code § 5601 – Criminal Penalties Engaging in business as a distiller with the intent to defraud the government of taxes is also a felony with similar penalties. Transporting or possessing untaxed spirits is another federal felony that can lead to significant fines, imprisonment, and forfeiture of the illegal spirits and any property, including vehicles, used in the commission of the crime.
Guidelines for Personal Moonshine Possession
While federal law strictly prohibits individuals from producing distilled spirits for personal use, the rules around possessing moonshine are more nuanced.6TTB: Alcohol and Tobacco Tax and Trade Bureau. Home Distilling In Tennessee, it is legal for an individual of legal drinking age to possess moonshine, provided it was legally produced and all applicable taxes have been paid. This means the moonshine must have been purchased from a licensed distillery or a legal retail package store.
There are no specific state-imposed quantity limits for the personal possession of legally purchased alcoholic beverages at one’s home. Federal law makes it a felony to possess any distilled spirit unless its container has the required tax stamp or closure, with penalties including fines and imprisonment. Therefore, any moonshine in an individual’s possession must be in a properly sealed and labeled container from a licensed producer.