Tito’s Vodka Maker Ordered to Pay $749K in Tax Case

(Photo: Tito’s Handmade Vodka)

A state high court has ruled that the maker of Tito’s Handmade Vodka must pay $749,000 in taxes, interest and penalties tied to sales in Maine, the Portland Press Herald reported Thursday.

The Maine Supreme Judicial Court ruled 4-1 to uphold a 2024 lower court decision that sided with the state’s tax assessment against Fifth Generation Inc., the Texas-based company behind Tito’s.

The case centers on the company’s failure to file required tax returns on vodka shipments into the state.

“Fifth Generation supplied a steadily increasing number of cases of vodka to Maine, starting with roughly five and a half cases in 2011 and ending with 6,582 cases in 2017,” the court said in its decision.

The ruling also overturned an earlier decision by the Maine Board of Tax Appeals that had favored the company.

The dispute highlights how states enforce tax compliance on alcohol shipments, particularly as distribution volumes grow over time.

Fifth Generation significantly expanded its presence in Maine during the period in question, increasing shipments from a handful of cases to thousands annually.

The court’s decision affirms the state’s authority to collect taxes, interest and penalties tied to those sales.

In September, Tito’s expanded for the first time, acquiring popular tequila brand LALO.