Although the state's Ozarks mountain region has a rich history of moonshine production, Arkansas law on the production and sale of liquor outside mainstream commercial channels is rather strict. Not only is it illegal to distill liquor without a state permit even when done at home for personal consumption, but merely having a reputation for being involved in moonshining can used as introduced as evidence against a defendant in court.

Moonshine is a popular term that generally refers to distilled liquor that has been illegally produced or distributed, although in recent years, it has also become synonymous with unaged white whiskey. Typically, moonshine does not refer to wine or beer -- at least when their alcohol content falls within the parameters established by law. Under federal law and the law of multiple states, including Arkansas, home brewing of beer and wine is legal in limited quantities.

Federal liquor law regulates liquor production and distribution, as well as the ownership of a still, which is defined as an apparatus that is capable of distilling ethyl alcohol from an alcohol-containing mixture. According to the U.S. Treasury Department, a still that has been set up for the production of distilled spirits must be registered with the federal government. Production or distribution without having first received a permit, and having put in place the required equipment and paid the mandatory taxes is illegal, regardless of whether one's intent is to operate the still just for personal use at home.

Arkansas law makes it illegal to own, possess or transport a still without a state permit. The same prohibition applies to a still's substantial parts, including a cooling coil. Moreover, it is illegal to produce liquor without a license or to distribute liquor that has been illegally made. Violating the state's liquor law is a felony, and property connected to the manufacture or distribution of illegal liquor can be seized and sold at auction.

Arkansas Beverage Control regulations provide for several dozen different types of permits related to the production, distribution or service of liquor. Permit rules include age, residence and character requirements, and a person applying for a permit to be a retail beer seller must take an oath not to have any distilled spirits on premises without the requisite additional permit. An additional limitation in Arkansas is that a number of the state's counties ban the sale of alcoholic beverages or are at least partially dry, banning liquor altogether.