Maine’s highest court has ruled that Fifth Generation, the maker of Tito’s Handmade Vodka, is required to pay $749,000 in unpaid taxes and fees. The case had been under legal scrutiny since 2018 and included multiple appeals from the company.

Fifth Generation argued that it shouldn’t be taxed in Maine since it does not have a physical location within the state. However, the Maine Supreme Judicial Court determined that the company had a significant enough tax presence due to its inventory being stored in a Maine warehouse, along with completing sales within the state’s regulated liquor distribution framework.

The court rejected the company’s claims of federal law exemption, highlighting that its activities involved more than merely soliciting orders; it was actively storing products and conducting sales in Maine, which qualifies as conducting business in the state. Furthermore, the court upheld Maine’s regulatory system as being constitutional and confirmed that the penalties applied were justified, given the company’s lack of legal basis for failing to pay the owed taxes.

For more information, you can view details on the ruling here.