You can now legally homebrew your own beer in all 50 states and making your own wine at home has been legal (within limits) since 1978. However, despite a national television show that features a regular crew of moonshiners, making your own whiskey is still illegal. Before you get into trouble, learn more about the laws that apply (and what to do if you really want to do it anyhow).
It's mostly about the taxes.
Frankly, moonshine and other liquors are worth a lot more in taxes than beer or wine. The current federal tax rate on a gallon of wine ranges from $3.15 to $1.07, depending on the proof. A 12 oz. beer will only fetch $0.05 worth of taxes. A gallon of distilled liquor, however, brings in $13.50 in federal taxes. Couple that with the fact that it's easier and quicker to produce large quantities of cheap distilled liquor than it is to create a drinkable wine or a serviceable beer and you can probably see why the federal government has more of an interest in keeping a tight control over the production of liquor. Unlicensed and untaxed moonshiners can cost the government a lot of lost tax revenue.
It's also about the health risks.
There are health concerns about unlicensed stills, as well, that warrant the government's concern. Moonshine is unaged ethanol, traditionally brewed from a mash of corn and sugar. Its alcohol content can easily exceed 50% (100 proof), which means that people can get far more intoxicated on it, far quicker, than regular aged spirits. Someone unaccustomed to such strong spirits could easily end up with alcohol poisoning if they drink too much moonshine too quickly.
Many homemade stills are also made with old vehicle radiators and other metal scraps that contain lead, which contaminates the brew. In addition, the distillation process itself produces methanol before the ethanol develops, which is toxic enough to cause blindness and death, and not every homebrewer knows how to keep the methanol out of their product.
It's also experiencing a resurgence in popularity.
Probably thanks to the rise of microbreweries and a renewed public interest in making homemade wines, as well as the popularity of television shows like Moonshiners, homemade spirits are on the rise. Copper stills are doing a brisk business online and out of specialty stores and a 2010 study by the BBC indicated that around a million illegal stills are operating around the U.S.
The stills are perfectly legal to sell, along with the raw ingredients to make the moonshine, because people use the stills for legal purposes as well. Anyone interested in learning how to make their own moonshine can also find a ready supply of books that will tell them how or online instructions.
It can be done legally.
There are essentially two ways that you can legally operate a still to produce ethanol. Both of them require a license from the Bureau of Alcohol, Tobacco, and Firearms. If you plan to make non-drinkable ethanol for the purposes of an alternative fuel, the application is surprisingly simple. It only takes about a month.
If you really want to brew your own liquor for consumption, you may be able to get a permit for a small craft distillery. Much like micro-breweries, these small artisanal distilleries are proving to be surprisingly popular businesses. Operating a craft distillery is a bit more complicated and requires additional permits and licensing. You also have to make sure that you're paying the proper taxes. However, it's far safer to go through the process of doing it legally, as a licensed distillery, than it is to flout the law and risk getting caught. Selling your moonshine without the proper licenses and taxes can net you a tidy profit, but it can also net you a 5-year jail term and a $10,000 fine.
If you want to set up your own craft distillery, contact an attorney (like those at FactorLaw) to help you with the appropriate licensing and legal requirements.