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Making moonshine and the taxes you'll owe

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Remember the bearded hipster who slipped you some homemade moonshine at that music festival one time? Remember how you convinced yourself you weren't breaking the law, but that it would be the hipster on the hook if the cops caught wind of it?

Think again, according to Jeff Lasater, special agent in charge of the Raleigh office of Alcohol Law Enforcement (ALE).

There's nothing nebulous about moonshine laws, Lasater said. North Carolina laws forbid the manufacture or possession of moonshine, or non-tax-paid spirituous liquor if you want to get technical.

State laws say homemade beer and wine are permissible, Lasater points out. "But liquor is totally different," he says.

Take his word for it. According to state figures, ALE agents reported 34 distillery seizures in North Carolina since 2010. That number is not quite representative because local sheriffs also seize and destroy liquor stills.

Moonshine traces its origins to illegal Appalachian distillers, and it comes with all sorts of colorful monikers such as mountain dew, Tennessee white whiskey and hooch.

Once viewed as a viable commercial trade in mountainous West Virginia, the homemade hooch has been on the wrong side of the law for decades, allegedly thanks to 18th-century American whiskey makers who squelched their competition with a little help from Washington, D.C.

Agents find the high-proof liquor all over the state, although law enforcement typically makes its biggest crackdowns in rural Johnston County to the southeast of Raleigh. Two weeks ago, Johnston County deputies said they netted a 500-gallon still and 2,000 gallons of the mash input in a barn north of Benson. And in February, ALE agents arrested another man in Benson for alleged moonshining, seizing hundreds of gallons of finished liquor and mash.

In Sampson County, just to the south of Johnston, local law enforcement reported two weeks ago that they discovered a large moonshine operation in a Clinton barn.

By the way, the hooch may be illegal, but tax offices take their share nonetheless, Lasater noted.

If sold by the drink, the N.C. Department of Revenue imposes a tax rate of $31.70 per gallon on moonshine, according to department spokeswoman Beth Stevenson. The rate is $12.80 per gallon if not sold by the drink, while mash is taxed at $1.28 per gallon and other illegal mixed beverages are taxed at $20 per 4 liters, which is roughly one gallon.

All told, the state agency reported $41,507 in total assessments in 76 cases for illicit liquor in the last two fiscal years, Stevenson said. That's a lot of moonshine moola.

This article appeared in print with the headline "Tear that stillhouse down."

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