Tequila is distilled and bottled in one of five states in Mexico (Jalisco, Nayarit, Guanajuato, Michoacan, Tamaulipas). Tequila is strictly regulated by a branch of the Mexican Government known as the TRC(Tequila Regulatory Council). The majority of the tequila that is imported into the U.S. is produced around the town of Tequila, in Jalisco.