What is the Alcohol and Tobacco Tax and Trade Bureau (“TTB”)?

What is the TTB?

The Alcohol and Tobacco Tax and Trade Bureau, also known as the TTB, is a federal agency tasked with regulating and enforcing laws related to alcohol and tobacco in the United States. The TTB operates as a division of the Department of the Treasury and has the primary responsibility of administering and enforcing the Federal Alcohol Administration Act (“FAA Act”) and the Internal Revenue Code (“IRC”). The TTB also has the primary jurisdiction of regulating alcohol beverages in the U.S. at the federal level (although other federal agencies, such as the FDA, USDA, and FTC, can also play a role). (Although TTB also regulates tobacco products, this article will only focus on TTB’s role as a regulator of alcohol beverages.)

History of the TTB

The TTB and its predecessor agencies have significant history dating back to the 19^th century. In 1862, President Abraham Lincoln signed the Internal Revenue Act, which established the Bureau of Internal Revenue (“BIR”) to collect taxes on most alcohol beverages and tobacco products. In 1880, the BIR was split into two agencies: the Bureau of Internal Revenue and the Bureau of Customs, both of which were responsible for collecting taxes on alcohol and tobacco.

In 1933, Congress passed the 21^st Amendment, which repealed Prohibition (and the 18^th Amendment) and simultaneously gave states the power to regulate the manufacture, transport, and sale of alcohol within their borders. To ensure that alcohol production and sales were properly regulated, Congress passed the FAA Act in 1935, which established the Alcohol Tax Unit (“ATU”) to administer and enforce the act.

In 1972, the ATU was renamed the Bureau of Alcohol, Tobacco, and Firearms (“BATF”). The BATF was responsible for enforcing federal laws related to alcohol, tobacco, firearms, and explosives. In 2003, the BATF was reorganized and split into two separate agencies: the Bureau of Alcohol, Tobacco, and Firearms (“ATF”), which is generally responsible for enforcing laws related to firearms and explosives, and the Alcohol and Tobacco Tax and Trade Bureau (“TTB”), which is generally responsible for enforcing laws related to alcohol and tobacco.

What are TTB’s Functions?

The TTB has several functions with respect to regulations alcohol beverage products that are produced and/or sold in the United States. Some of the agency’s roles include:

• Issuing permits: The TTB is responsible for issuing federal basic permits with respect to the production, importation, and distribution of alcohol beverages. Some of these permits include winery permits, distilled spirits plant or DSP permits, brewer’s notices, wholesalers permits, and importer permits.
• Reviewing and issuing Certificates of Label Approval (“COLAs”): The agency regularly reviews label applications for alcohol beverage products that are sold in the United States. TTB issues Certificate of Label Approvals or COLAs for labels it approves for use on alcohol beverage containers.
• Reviewing and issuing formula approvals: The TTB reviews and issues formula approvals for alcohol beverage products requiring formulation approval. Formulas are not required for all alcohol beverage products but, for those that are, an industry member typically must submit the ingredients used in the product along with information on how the product is made.
• Collecting taxes: The TTB collects federal excise taxes on alcohol beverages. Typically, the federal excise taxes are paid to TTB by the U.S. manufacturer or the U.S. importer.
• Enforcing regulations: The agency also enforces regulations related to labeling, advertising, and marketing of alcohol beverage products that are sold in the U.S. Further, the agency enforces regulations pertaining to the manufacture, importation, and distribution of alcohol, among other related regulations.
• Conducting audits: TTB conducts audits of industry members to ensure compliance with federal alcohol beverage laws and regulations.
• Conducting investigations: TTB also conducts investigations with respect to suspected violation of federal alcohol beverage laws. This may include an industry member’s failure to pay federal excise taxes, failure to hold a permit, failure to file required reports or returns, or similar violations (not an exhaustive list).

The TTB is a federal agency with primary jurisdiction over the regulation of alcohol beverages that are produced, imported, distributed, and sold within the United States. Its history is significant and dates back to the 19^th Century despite several name changes and restructuring that has occurred. The TTB is an agency responsible for issuing permits, reviewing labels and issuing COLAs, reviewing formulas, conducting audits, conducting investigations, and much more. It is the backbone to helping to ensure that the beverage alcohol industry is compliant and that an even playing field is upheld.

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. The firm has experience working on applications for startups to multinational conglomerates and with drafting brand new permit applications as well as drafting amendments. Our experience also extends to labeling, formulations, excise taxes, trade practices, and beyond.

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).