To amend the Internal Revenue Code of 1986 to exempt home distillery establishments from taxation and other requirements, and for other purposes.

To amend the Internal Revenue Code of 1986 to exempt home distillery establishments from taxation and other requirements, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Short title.

SEC. 2. Exemption of home distillery establishments from taxation and other requirements.

(a) Exemption from tax.—Section 5001 of the Internal Revenue Code of 1986 is amended—

(1) by redesignating subsection (d) as subsection (e), and

(2) by inserting after subsection (c) the following new subsection:

“(d) Exemption for distilled spirits produced at home distillery establishments.—Subject to regulations prescribed by the Secretary, the tax imposed by subsection (a) shall not apply to distilled spirits produced at a home distillery establishment.”.

(b) Definition of home distillery establishment; clarification of related definitions.—

(1) DEFINITION OF HOME DISTILLERY ESTABLISHMENT.—Section 5002(a) of such Code is amended by adding at the end the following new paragraph:

“(16) HOME DISTILLERY ESTABLISHMENT.—

“(A) IN GENERAL.—The term ‘home distillery establishment’ means an establishment that—

“(i) is located in the dwelling house of the owner of such establishment, or in any shed, yard, or inclosure connected with such dwelling house, and

“(ii) produces distilled spirits solely for personal or family use by the owner of such establishment.

“(B) PERSONAL OR FAMILY USE.—

“(i) IN GENERAL.—A home distillery establishment shall be treated as producing distilled spirits solely for personal or family use if—

“(I) such establishment produces no more than—

“(aa) in the case of a household with only 1 adult, 10 proof gallons of distilled spirits per calendar year, or

“(bb) in the case of a household with 2 or more adults, 20 proof gallons of distilled spirits per calendar year, and

“(II) no distilled spirits produced by such establishment are sold to any person, or transferred to any person for sale by such person.

“(ii) ADULT.—For purposes of this paragraph, the term ‘adult’ means an individual who has attained 21 years of age, or the minimum age (if any) established by law applicable in the locality in which the household is situated at which distilled spirits may be sold to individuals, whichever is greater.”.

(2) CLARIFICATION OF RELATED DEFINITIONS.—

(A) DEFINITION OF DISTILLED SPIRITS PLANT.—Section 5002(a)(1) of such Code is amended by adding at the end the following new sentence: “Such term shall not include any home distillery establishment.”.

(B) DEFINITION OF DISTILLER.—Section 5002(a)(4) of such Code is amended by adding at the end the following new flush sentence:

“Such term shall not include any person who produces only distilled spirits exempt from tax under section 5001(d).”.

(c) Exemption from notice requirements related to stills.—Section 5101(a) of such Code is amended by adding at the end the following new paragraph:

“(3) EXEMPTION FOR STILLS USED TO PRODUCE DISTILLED SPIRITS AT HOME DISTILLERY ESTABLISHMENTS.—Any requirements prescribed by the Secretary under paragraph (1) or (2) shall not apply with respect to any still, boiler, or other vessel manufactured or set up exclusively for the purpose of distilling at a home distillery establishment.”.

(d) Limitation on sales of stills for home distillery establishments.—

(1) IN GENERAL.—Section 5101 of such Code, as amended by subsection (c), is amended—

(A) by redesignating subsection (b) as subsection (c), and

(B) by inserting after subsection (a) the following new subsection:

“(b) Limitation on sales of stills for home distillery establishments.—The Secretary shall, pursuant to regulations, require that no still, boiler, or other vessel may be sold or transferred to any person who intends to use such still, boiler, or vessel solely as part of a home distillery establishment, unless such still, boiler, or vessel has—

“(1) a pressure release valve,

“(2) a vacuum relief valve, and

“(3) a capacity of not greater than 50 gallons.”.

(2) CONFORMING AMENDMENT.—The heading of section 5101 of such Code is amended by striking “set up of still” and inserting “set up of still; limitation on certain sales of stills”.

(e) Exemption from stills registration requirement.—Section 5179(a) of such Code is amended by inserting “stills or distilling apparatus set up in a home distillery establishment and” after “except that”.

(f) Nonapplication of prohibition on production or use of distilling materials in certain locations.—Section 5222(a)(2)(C) of such Code is amended by striking “section 5042 or 5053(e)” and inserting “section 5001(d), 5042, or 5053(e)”.

(g) No criminal penalty for distilling in home distillery establishment.—Section 5601(a)(6) of such Code is amended by inserting “or in the case of a home distillery establishment” after “section 5178(a)(1)(C)”.

(h) Effective date.—The amendments made by this section shall apply to distilled spirits produced, and stills, boilers, and other vessels sold, after December 31, 2026.