Overview
April 2026 brought significant legal and regulatory developments for the alcoholic beverage industry, including a landmark US Court of Appeals for the Fifth Circuit decision striking down the federal home distilling ban and notable state-level changes affecting taxation, trade practices, and sales operations.
In Depth
Federal flashpoint: Circuit courts split on home distilling ban
Two federal circuit courts recently issued conflicting rulings on the constitutionality of the federal home distilling ban, creating a circuit split that may lead to Supreme Court review.
On April 10, 2026, the Fifth Circuit held unconstitutional the federal prohibition on home distilling in 26 U.S.C. §§ 5178(a)(1)(B) and 5601(a)(6), ruling that the ban violates the Taxation and Necessary and Proper clauses because it operates as an “anti-revenue provision” that prevents distilled spirits from coming into existence, rather than raising revenue, and is not “plainly adapted” to Congress’s taxing power.
Meanwhile, on April 21, 2026, the Sixth Circuit reached the opposite conclusion, upholding the same statutory provisions as constitutional and holding that the ban is a necessary and proper means of collecting the federal excise tax on distilled spirits because home stills are easier to hide and harder to search than bonded premises. The Sixth Circuit also held that the ban shifts consumption from untaxed spirits to taxed spirits, thereby increasing revenue.
The Fifth Circuit decision removes the federal criminal prohibition in Texas, Louisiana, and Mississippi but does not affirmatively legalize home distilling, leaving it in a regulatory gray area subject to state law restrictions and unresolved federal permitting and tax requirements. However, the ban remains in effect in the Sixth Circuit and other circuits that have not yet ruled on the issue.
State developments: Maryland eases trade rules while Kansas expands sales hours
Recent state regulatory developments have introduced significant changes to alcoholic beverage taxation, trade practices, and sales regulations across multiple jurisdictions.
Maryland has updated its trade practices by removing restrictions on variety pack sales, eliminating the pre-approval requirement for brand promotional items costing less than $600 and increasing the maximum bar spend by brand owners, suppliers, and wholesalers at promotional events to $200, including reasonable tips to staff. These updates provide welcome flexibility for promotional activities and variety pack distribution, reducing compliance burdens and administrative costs while enabling more creative marketing strategies and streamlining promotional planning and execution.
Kansas enacted legislation expanding alcohol sales hours to 23 consecutive hours per day (6:00 am through 5:00 am the following day) exclusively during the 2026 FIFA World Cup tournament from June 11 through July 19, 2026. This temporary expansion creates a limited but significant opportunity for increased sales during a major international event. Retailers and suppliers should prepare inventory and staffing strategies to capitalize on the extended hours while ensuring compliance with the authorization’s timeframe and conditions. Companies should also monitor whether this temporary expansion influences longer-term legislative discussions about modernizing alcohol sales hours in Kansas.