If you are planning to start a winery, brewery, or distillery in the United States, you will need to apply for and obtain a federal basic permit or brewer’s notice from the TTB. Applying for a permit can be a complicated and tie consuming process, especially for folks who are not familiar with the permit application process. However, it is a necessary step to legally produce and bottle wine, beer, or distilled spirits in the United States. This article will outline some of the items that are generally needed to apply for an original TTB basic permit or brewer’s notice.
- Business Name
Perhaps the first item a new company will need before obtaining a federal basic permit is a business name. A business name will also be required before the actually entity cane be formed or organized at the state level. While business names can generally change, a name is still required from the outset of the formation of a business entity. The business name will also appear on the TTB federal basic permit at the time of application.
- Business Structure
The first item you should. consider before applying for a TTB permit is the type of business structure you wish to form or use. This is a key step before applying for a permit as the entity — such as an LLC or corporation — will need to be formed or organized and proof of such will need to be submitted with the application. Because business structure can play a significant role in your company’s approach to market, we recommend speaking with an attorney and/or tax professional to determine the best setup for your specific needs.
- Obtain an EIN
Once the entity is set up, an EIN must be obtained from the IRS. Typically, this can be done online. An EIN will be required in order to proceed with many essential business items, such as setting up business bank accounts or hiring employees.
- Trade Name or Doing Business As Name
If you intend to do business under a fictitious business name or a trade name, then such may require registration at the state and/or local or county levels. Additionally, once the name is approved at the state and (if applicable) local levels, such should be registered with the TTB as well.
- Bond
A bond may be required as part of the application for a winery, brewery, or distillery depending on the anticipated federal excise tax liability. (Bonds re generally not required for federal importer permit applications or federal wholesaler permit applications assuming that the applicant does not plant to export non-taxpaid alcohol.) To determine whether or not a bond may be required and — if it is required — how much the bond should be made out for, it is ideal to work with an industry professional who has experience calculating bond amounts and determining requirements.
If a bond is required, it is also one of the most challenging parts of a permit application, especially if the applicant or the applicant’s insurance broker does not have prior experience working on alcohol beverage bonds. It is not uncommon for first-time applicants — and repeat applicants — to make mistakes on the bond, causing the TTB permit specialist to send the bond back and/or to request that a new bond to be issued.
- Diagram
A diagram is required as part of the TTB federal permit application for a new winery, brewery, or distilled spirits plants. The diagram generally must should the bonded TTB premises in relation to the remaining portion of the building or buildings. It is generally the most detail oriented portion of the application and will provide the TTB with a snapshot of how the industry member plans to use the proposed space.
Because a diagram can be extremely details and very important with respect to a company’s operations, it is recommended that industry members work with a professional who can provide insight and guidance on what is required on the diagram, portions that may be missing, and point out potential pitfalls.
- Operations
As part of the application for a winery, brewery, or a distilled spirits plant, a detailed description of operations will need to be included. The operations description informs TTB of the types of products the company will produce as well as the applicant’s level of involvement in production.
It is important to review the operations section to make sure it properly encompasses the proposed business activities. Additionally, the operations should be reviewed on a regular basis to make sure that the actual conduct of the business match what is on file with TTB.
- Source of Funds
As part of the application, the industry member must disclose information on how the business is funded. The source of funds disclose to TTB the amounts and origin of the funding that will be used to start or operate the business. Generally, this requirement can be satisfied by providing copies of bank statements that provided the original capital. In other instances, copies of loans or similar documentation may satisfy this requirement.
Note: The above items are intended for general information purposes only and are not an exhaustive list. Additional documentation or information may be required depending on the type of application applied for, the specifics of the business model, and individuals involved.
Why Should You Work with a Legal Professional for the TTB Application?
New industry members often wonder whether or not they should hire a legal professional to assist with the federal TTB permit application. Applying for the TTB federal basic permit requires a significant amount of planning and preparation as well as organization. Often, working with an alcohol beverage attorney can be fruitful to the success of your application and may assist with avoiding potential shortcomings or pitfalls. Having a member on your team who has been through the process many times in the past and can provide a guiding light throughout the process can allow your company to divert time and energy to focusing on other portions of the business.
Lindsey Zahn P.C. is a firm that focuses on alcohol beverage law and has represented a multitude of clients before the TTB, ranging from wineries to breweries to distilleries to importers to wholesalers and beyond. We have experience working on applications for startups to multinational conglomerates and with drafting brand new permit applications as well as drafting amendments. Through our years of experience drafting applications, we have developed a process that we believe helps to streamline the data collection from you so that your company can focus its time on other important projects.
Contact Lindsey Zahn P.C. to schedule an introductory meeting to discuss your needs and products and to learn more about how we can help: info@zahnlawpc.com or (929) ZAHNLAW (929-924-6529).