November 10, 2004

What’s New at TTB?

Michael Brill Newman

Unless you’ve been in a Rip Van Winkle sleep for the past few years, readers should know that under the Homeland Security Act, the federal government in January 2003 transferred its alcohol beverage regulatory and tax collection functions from the Bureau of Alcohol, Tobacco & Firearms (ATF) to the newly-created Alcohol and Tobacco Tax and Trade Bureau (TTB). Tobacco regulation and tax collection also went to TTB, but firearms remained with ATF.

After somewhat of a slow start, TTB now appears to be beefing itself up with new hires both at the administrative and field levels and flexing its muscles, even in the trade practice area. In October, 2004, TTB suspended for seven days the permit of W.O.W. Distributing Company of Sussex, Wisconsin for entering into an agreement with a Wisconsin auto raceway prohibiting the raceway from purchasing products from or promotionally associating with other wholesalers.

Also in October, President Bush signed into law the “American Jobs Creation Act” which includes a provision suspending for three years beginning July 1, 2005 the federal special occupational tax for alcohol beverage industry members. However, we understand from TTB sources, TTB will issue a bulletin shortly advising industry members they still must file the returns for the special tax even though no payment will be due. The suspension will annually save producers $1,000, wholesalers $500, and retailers $250, with total savings to the industry estimated at $234 million.

Finally, TTB on November 2, 2004 released an Industry Circular announcing its Voluntary Disclosure Program encouraging alcohol beverage industry members to turn themselves in for “instances of non-compliance” with federal laws and regulations. TTB indicates that in response to such disclosures they will be “more lenient” in disciplinary actions they will take except for disclosures involving fraud or willful and potentially criminal acts. OK, so now ‘fess up!

All this activity reflects that we are seeing an energized and now alcohol beverage industry -dedicated federal agency which we expect will provide excellent services and resources to our industry.

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