What constitutes "Personal Use"?

Every now and then a thread pops up here by someone trying to figure out a way to profit from there homebrew without having to register with the TTB. The poster is usually shot down pretty quick and told he can’t get around the law. And then everyone goes back to posting about how much there friends like there beer and who won what in homebrew competitions.

But, to me, it sure looks like the same law that forbids selling your beer also forbids GIVING it to anyone other than family. Is there some sort of case law that I am missing that has clarified this? Let’s look at the law.

Sec. 25.205
Production


(a) Any adult may produce beer, without payment of tax, for personal or family use and not for sale. An adult is any individual who is 18 years of age or older. If the locality in which the household is located requires a greater minimum age for the sale of beer to individuals, the adult shall be that age before commencing the production of beer. This exemption does not authorize the production of beer for use contrary to state or local law.

(b) The production of beer per household, without payment of tax, for personal or family use may not exceed:

(1) 200 gallons per calendar year if there are two or more adults residing in the household, or (2) 100 gallons per calendar year if there is only one adult residing in the household.
(c) Partnerships except as provided in Sec. 25.207, corporations or associations may not produce beer, without payment of tax, for personal or family use.


(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5053))

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Of course States can pass stricter laws, but they can’t pass laxer ones. So I would like to focus on this particular federal law as it affects most of us on this board. It clearly states for personal and family use. What constitutes “personal use”? Does giving a brew to your best friend constitute personal use? Does giving a sixer to a colleague constitute personal use. Does entering your beer in a contest where judges will be drinking it constitute personal use?

I must be missing something because people AREN’T being prosecuted for these things. The police aren’t storming homebrew competitions. Has there been further legislation or case precedent that defines “personal use” as more than one’s own personal consumption?

Never invite an ATF agent over on brew day.

Federally nothing's change, you have all the laws as stared in those links I gave you. I think it's in State Law were "personal use" is being defined, and those are the ones that prevent homebrew from being transported to meetings, and contests from happening.You'll have to look at the laws in Utah, Arkansas, and I think Texas has some screwey laws that relate to us. Listening to the podcasts on Basic Brewing will give you an idea, at least every 6 months or a year they give a legislation update show.

Brewer_Bob said:

I must be missing something because people AREN’T being prosecuted for these things. The police aren’t storming homebrew competitions.

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But occasionally they are shutting down homebrew events, and seizing kegs.

Liquor agents bust campus Homebrew Fest, confiscate 13 kegs


Or the big thing with the Alabama Homerbrewer, who may or may not have been distilling.

So persecution does happen. Just not on a huge, prohibition era scale, but that's not to say it couldn't happen. The FDA is always shutting down things like alcohol/caffeine drinks, and that crap that kids are smoking for a "legal high" If there's enough hysteria the government will take action. There's always a low level of hysteria where booze is concerned. MADD actually has a huge pr machine and that can swy popular opinion, and they are good lobbyist, interntationally. It wouldn't be too much of a stretch to think that if our country went dry again, they'd love it.

Look what may be happening in Canada; DUI legislation may expand to allow random breathalyzer tests

No probable cause would be necessary to be forced to breath into a tube.


So it's a fine line we tread. And you're right, the vague definitions don't really help.

Well I'll make a guess and say that the legal definition of personal use is just that, personal.

However, I also think its not unreasonable to assume that because this law does not clearly define personal as "the individual producing the beer" that personal use could also include "personally giving some beer away".

The law doesn't say you can freely give away beer to everyone but I'm sure if it became a big enough event, that you might run into a problem. (Like the article Revvy linked - although it seemed to be more about the selling of, not the giving away of the beer)

Realistically though, I doubt the Feds are concerned with individuals giving away beer to non-family people. Perhaps it's purposely vague or maybe the word "personal" was just thrown in there to make the majority of home brewers think twice about distributing free beer on a large scale?

Thats my two cents anyways.

As was mentioned, the federal law is pretty broad and undefined. Some of the states laws are much more strict. In Michigan, we're allowed to give away beer and the amount per person that we're allowed to give is defined in the law. In some states (Oregon), they've recently interpreted the law to say that "homebrew" must be consumed and not removed from the "home" where it legally originated. That means you can't even take it to your campsite, or your own cottage or boat.

But the federal law doesn't define these issues. As long as you stayed under 200 gallons per year (if you have two adults in the house) and don't sell it, you should be ok. You couldn't make tons of it, and charge people, either because that would not be "personal use", at least the way I read it.

The law is broad, the definitions are purposefully vague, this allows the "authorities" to bust people if and when they feel like it, this is how police states operate.

The feds aren't "concerned" about you giving away beer to non family members or selling it. They simply want a cut of your profits through taxation (theft) and licensing, and most importantly they want control over you.

I'm not sure about beer, but I did find this section describing home-made wine. I have to imagine that would be sufficient case law to expand "personal use" to this definition. The general consensus seems to be that "personal use" and non-commercial use are almost synonymous.

TITLE 27--ALCOHOL, TOBACCO PRODUCTS AND FIREARMS

CHAPTER I--ALCOHOL AND TOBACCO TAX AND TRADE BUREAU, DEPARTMENT OF THE TREASURY

PART 24_WINE--Table of Contents
(f) Removal. Wine produced under this section may be removed from the premises where made for personal or family use including use at organized affairs, exhibitions or competitions, such as home winemaker's contests, tastings or judgings, but may not under any circumstances be sold or offered for sale. The proprietor of a bonded wine premises shall pay the tax on any wine removed for personal or family use in excess of the limitations provided in this section and shall also enter all quantities removed for personal or family use on TTB F 5120.17, Report of Bonded Wine Premises Operations. (Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as amended (26 U.S.C. 5042))

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North Carolina Chapter 18B, Article 3, §18B-306 permits an individual to make, possess, and transport native wines and malt beverages for his own use and for the use of his family and guests.

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woo hoo! ;D

RuddurBall said:

I'm not sure about beer, but I did find this section describing home-made wine. I have to imagine that would be sufficient case law to expand "personal use" to this definition. The general consensus seems to be that "personal use" and non-commercial use are almost synonymous.

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How current is this? SInce 9-11 ATF spun off Alcohol to the TTB to concentrate on weapons in the war on terror. That may be an outdated definition.

Revvy said:

How current is this? SInce 9-11 ATF spun off Alcohol to the TTB to concentrate on weapons in the war on terror. That may be an outdated definition.

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April 2006. Here is the link.

http://www.ttb.gov/wine/24_75.htm

RuddurBall said:

April 2006. Here is the link.

http://www.ttb.gov/wine/24_75.htm

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Oh yeah, that's TTB, NOT ATF.

On January 24, 2003, the Homeland Security Act of 2002 (the Act) established the Alcohol and Tobacco Tax and Bureau (TTB). Rendering the functions of the Bureau of Alcohol, Tobacco and Firearms (ATF) into two new organizations with separate functions, the Act created a new tax and trade bureau within the Department of the Treasury, and shifted certain law enforcement functions of ATF to the Department of Justice. The Act called for the tax collection functions to remain with the Department of the Treasury; and the new organization was called the “Alcohol and Tobacco Tax and Trade Bureau.”

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I would say that "personal use" differs from "Commercial Use", where the product produced is in some way sold, or traded. We all know that either of these, in any way shape or form, is illegal.

The states have varying restrictions on what may be done once the product is made. in Michigan we can give away like 20 gallons as gifts. In some other states, you can't move it from your property of the home (even to a cottage, or boat, as Yooper says!)

That's MY interpretation, so don't go passing your homebrew around willy nilly based on my post!

IRC 5053(e):

(e) Beer for personal or family use. Subject to regulation prescribed by the Secretary, any adult may, without payment of tax, produce beer for personal or family use and not for sale. The aggregate amount of beer exempt from tax under this subsection with respect to any household shall not exceed--
(1) 200 gallons per calendar year if there are 2 or more adults in such household, or
(2) 100 gallons per calendar year if there is only 1 adult in such household.

For purposes of this subsection, the term "adult" means an individual who has attained 18 years of age, or the minimum age (if any) established by law applicable in the locality in which the household is situated at which beer may be sold to individuals, whichever is greater.

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That gives us an indication that "personal use" or "family use" does not include any sale, which presumably will include any sort of trade, barter, etc. where consideration is given in exchange for beer.

27 C.F.R. 25.206

Beer made under § 25.205 may be removed from the premises where made for personal or family use including use at organized affairs, exhibitions or competitions such as homemaker's contests, tastings or judging. Beer removed under this section may not be sold or offered for sale.

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(25.205 refers to the DOT regulation of the IRC section above.)

So the federal government does make an exception for tastings, competitions, etc. This is valid law as of today, by the way.

Remember that the federal definition is very broad because the federal regulation of alcohol has mostly to do with transportation, taxation and labeling. It has very minimal jurisdiction because the 21st Amendment affords most alcohol-related regulatory power upon the states. So although the federal government does not specify every detail (if the law ever could) your state alcohol regulator and/or courts may have provided further limitations or clarifications on what constitutes family/personal use and the manner in which those tastings, competitions, etc. can be done and how much can be provided to them.

Outside of any state regulations providing further clarification, there haven't been any cases I could find where courts had to contemplate the meaning of those terms to provide additional clarification. That doesn't mean that a court that has jurisdiction over you couldn't adopt a more strict definition that limits what a "tasting" is (say 2oz. per taster instead of 6 beers per taster). Courts can employ definitions from other bodies of law and I'm sure there is a reasonable definition somewhere in the IRC or another body of law that would provide an acceptable interpretation of personal/family use that is well within the bounds of common sense.

Thanks for citing these statutes everyone. That was just what I was looking for and clears things up a bit.

You can see from the text that no definition is given, except to specify that you cannot produce it for sale. 95% of the time, when a definition isn't given in the law, you need to see how the courts have interpreted the term. Sometimes, the courts won't even give an interpretation of the term, especially broad, philosophical ideas. It isn't by accident that the statutes all specifically say that producing for sale does not enter personal use. Selling entails commercial use.

In this case, the ordinary meaning must prevail, unless State law (doesn't apply to you) or the courts have given a specific interpretation (doesn't seem like they have). If you don't sell and keep it for your own use or your family, you are in the right. Once the beer starts to get out of the home and into the hands of other people (or being passed on as "gifts") I think you are out of "personal use" wich for a foodstuff, usually means "personal consumption". This doesn't mean you can't throw a party and invite friends over to have a beer, but I wouldn't mix job functions with homebrew (ie. throwing a party for foreign dignitaries and serving your beer). You have to remember that for centuries, Americans have brewed beer, cider and wine for their own households. At the federal level, that practice is now kosher. Brewing for personal use. All the tricks about other people buying your ingredients or pitching the yeast themselves, that does not enter personal use in my mind and no amount of feable smoke and mirrors will hold up in court.

Play it safe. If there's anything you learn while studying the law is that no matter what, all it takes is an overzealous official or the wrong judge to make your life miserable and create all sort of hassle, even if you are "in the right" according to the word of the law.