Department of the Treasury

Alcohol and Tobacco Tax and 

Trade Bureau (TTB)

Congressional Justification 

for Appropriations and 

Annual Performance 

Report and Plan

FY 2018 
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Table of Contents

Section I – Budget Request........................................................................................................... 3

A – Mission Statement................................................................................................................ 3

B – Summary of the Request ...................................................................................................... 3

1.1 – Appropriations Detail Table.........................................................................................................4

1.2 – Budget Adjustments Table...........................................................................................................4

C – Budget Increases and Decreases Description....................................................................... 4

1.3 – Operating Levels Table................................................................................................................6

D – Appropriations Language and Explanation of Changes ...................................................... 7

E – Legislative Proposals............................................................................................................ 7

Section II – Annual Performance Plan and Report................................................................... 8

A – Strategic Alignment ............................................................................................................. 8

B – Budget and Performance by Budget Activity ...................................................................... 8

2.1.1 Collect the Revenue Resources and Measures................................................................... 8

Collect the Revenue Budget and Performance ........................................................................... 8

2.1.2 Protect the Public Resources and Measures..................................................................... 11

Protect the Public Budget and Performance ............................................................................. 12

Section III – Additional Information ........................................................................................ 15

A – Summary of Capital Investments....................................................................................... 15
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Section I – Budget Request

A – Mission Statement

To collect the taxes on alcohol, tobacco, firearms, and ammunition; protect the consumer by 

ensuring the integrity of alcohol products; and prevent unfair and unlawful market activity for 

alcohol and tobacco products.

B – Summary of the Request 

Supporting the nation’s economic vitality is at the core of the work performed by the Alcohol 

and Tobacco Tax and Trade Bureau (TTB). The Bureau’s role in permitting, regulating, and 

taxing the alcohol, tobacco, and firearms industries facilitates a compliant and fair marketplace

for those engaged in the manufacture and trade of these commodities, and ensures that the 

Federal Government has the resources needed to fund national priorities. TTB administers its 

mission according to two core strategic goals—“Collect the Revenue” and “Protect the Public”—

both of which support Treasury in promoting economic growth and stability and in fairly and 

effectively reforming and modernizing Federal tax systems. 

TTB is the third largest tax collection agency in the U.S. Government, after the Internal Revenue 

Service and U.S. Customs and Border Protection, collecting more than $22 billion in excise tax 

revenues annually. As the most efficient means of tax administration, facilitating voluntary 

compliance will remain a priority for TTB in FY 2018. To this end, TTB will enhance its 

guidance related to Federal alcohol, tobacco, firearms, and ammunition laws and regulations, and 

explore opportunities to streamline regulations and requirements to reduce compliance burden. 

TTB will also focus on improving internal processes to contribute to continued positive returns 

on the investment in TTB.

Alcohol and tobacco diversion remain long-term tax enforcement challenges given the high 

profits to be gained from illegal activity, the relative ease of diversion, and the substantial 

revenue loss that it represents. Failure to address illicit trade not only deprives governments of 

revenue, but also gives non-compliant actors an unfair competitive advantage over their lawful 

counterparts. Given this, TTB will maintain its efforts to employ risk modeling to target its

audits and investigationsto remain focused on the highest risk activity. TTB will also prioritize 

its enforcement cases to most effectively deploy its criminal agents to detect and deter illicit 

trade.

As demand for TTB services has grown in line with the expanding alcohol industries, TTB has 

responded through updated policies to reduce burden, systems modernization, and streamlined 

processes to ensure the timely turnaround of applications for new and existing wineries, 

breweries, and distilleries. Delays can cause financial hardships for these businesses and create a 

barrier to compliant commerce. In FY 2018, TTB will revise its service standards in line with 

anticipated staffing levels and ensure the new standards are clearly communicated to industry in 

order to manage expectations and allow appropriate operational planning. TTB will further 

adjust its strategy for systems modernization to align with resource levels, continuing to focus on 

clear and consistent guidance to industry to facilitate the submission of compliant applications. 
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1.1 – Appropriations Detail Table

Dollars in Thousands

TTB FY 2016 FY 2017 FY 2018 FY 2017 to FY 2018

Appropriated Resources Enacted Annualized CR Request $ Change % Change

 FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Collect the Revenue 229 $52,785 242 $53,458 223 $49,425 (19) ($4,034) -7.85% -7.55%

Protect the Public 241 $53,654 252 $52,779 233 $49,233 (19) ($3,545) -7.54% -6.72%

Subtotal New Appropriated Resources 470 $106,439 494 $106,237 456 $98,658 (38) ($7,579) -7.69% -7.13%

Other Resources:

Reimbursables 10 $6,992 10 $6,972 10 $6,972 0 $0 0.00% -00.00%

Subtotal Other Resources 10 $6,992 10 $6,972 10 $6,972 0 $0 0.00% -00.00%

Total Budgetary Resources 480 $113,431 504 $113,209 466 $105,630 (38) ($7,579) -7.54% -6.69%

Note: FY 2016 FTE and Other Resources are Actual

1.2 – Budget Adjustments Table

Dollars in Thousands

TTB FTE Amount

FY 2017 Annualized CR 494 $106,237 

Changes to Base:

Maintaining Current Levels (MCLs): $2,102 

Pay-Raise - $909 

Pay Annualization - $333 

Non-Pay - $860 

Efficiency Savings - ($570)

Reduce Infrastructure Footprint - ($250)

Reduce Support Services - ($320)

Subtotal Changes to Base - 1,532 

Total FY 2018 Base 494 $107,769 

Program Changes:

Program Decreases (38) ($9,111)

Program Staff Attrition and 

Incentives (38) ($4,150)

IT Development and Modernization - ($2,500)

Program Contract Reductions - ($2,461)

Subtotal Program Changes (38) (9,111)

Total FY 2018 Request 456 98,658 

C – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ......................................................+$2,102,000 / +0 FTE

Pay Raise +$909,000 / +0 FTE 

Funds are requested for the proposed January 2018 pay-raise.

Pay Annualization +$333,000 / +0 FTE 

Funds are requested for annualization of the January 2017 pay-raise.
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Non-Pay +$860,000 / +0 FTE 

Funds are requested for non-labor expenses such as travel, contracts, rent, supplies, and 

equipment.

Efficiency Savings ...........................................................................................-$570,000 / -0 FTE

Reduce Infrastructure Footprint -$250,000 / -0 FTE

TTB has implemented an aggressive telework program that has enabled the bureau to close half 

of its field offices, with the remaining field offices being vital to TTB’s mission. TTB has also 

reconfigured and reduced the amount of office space needed to operate its headquarters in 

Washington, D.C., and the National Revenue Center in Cincinnati. In an ongoing effort to 

improve space utilization, TTB has identified additional opportunities to reduce leased space, 

resulting in additional savings of $250,000. 

Reduce Support Services -$320,000 / -0 FTE

TTB will reduce its operating costs through savings in administrative overhead and decreased 

program support operations in line with anticipated program staff attrition.

Program Deceases ......................................................................................-$9,111,000 / -38 FTE

Program Staff Attrition and Incentives -$4,150,000 / -38 FTE

TTB will implement a hiring freeze to achieve a workforce reduction of 38 FTE. This reduction, 

which equates to 8 percent of TTB’s full-time positions, will be taken across multiple program 

areas. TTB will continuously evaluate the capacity of its workforce to absorb the workload 

associated with those positions lost through attrition and, as necessary, adjust its service 

standards to reflect anticipated staffing levels. This reduction also reduces performance 

incentives recognizing special acts and high-performing employees in order to minimize staffing 

losses.

IT Development and Modernization -$2,500,000 / -0 FTE

TTB will cut IT development and modernization investments in its core business systems and 

focus on essential maintenance of existing systems. Planned system enhancements targeted at 

reducing compliance errors on permit, label, and formula applications and in tax filings will be 

postponed, which will impact timely service delivery and efficient tax enforcement. 

Program Contract Reductions -$2,461,000 / -0 FTE

TTB will reduce its contract services by reducing or re-scoping contracts for both its commercial

vendors and government suppliers. These reductions will require reprioritization of the criminal 

case pipeline to ensure effective case management and resolution. 
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1.3 – Operating Levels Table

Dollars in Thousands

TTB FY 2016 FY 2017 FY 2018

Object Classification Actual Annualized CR Request

11.1 - Full-time permanent 46,047 49,280 47,556

11.5 - Other personnel compensation 801 1,060 500

11.9 - Total personnel compensation 46,848 50,340 48,056

12.0 - Personnel benefits 14,976 14,720 13,981

13.0 - Benefits for former personnel 5 5 5

Total Personnel and Compensation Benefits $61,829 $65,065 $62,042

21.0 - Travel and transportation of persons 1,688 1,746 1,700

22.0 - Transportation of things 20 33 30

23.1 - Rental payments to GSA 3,941 4,303 4,053

23.3 - Communication, utilities, and misc charges 1,337 1,732 1,732

24.0 - Printing and reproduction 215 268 268

25.2 - Other services from non-Federal sources 27,728 23,880 20,136

25.3 - Other goods and services from Federal sources 6,892 7,129 6,616

26.0 - Supplies and materials 432 456 456

31.0 - Equipment 2,012 1,625 1,625

Total Non-Personnel $44,265 $41,172 $36,616

New Budgetary Resources $106,094 $106,237 $98,658 

FTE 470 494 456

Note: This table includes total annually appropriated funding (actuals for FY 2016 and estimates for FY 2017 Annualized CR 

and FY 2018).
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D – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

ALCOHOL AND TOBACCO TAX AND TRADE BUREAU

Federal Funds

SALARIES AND EXPENSES

For necessary expenses of carrying out section 1111 of the 

Homeland Security Act of 2002, including hire of passenger 

motor vehicles, $98,658,000; of which not to exceed $6,000 for 

official reception and representation expenses; not to exceed 

$50,000 for cooperative research and development programs for 

laboratory services; and provision of laboratory assistance to 

State and local agencies with or without reimbursement.

Note.—A full-year 2017 appropriation for this account was not 

enacted at the time the budget was prepared; therefore, the budget 

assumes this account is operating under the Further Continuing

Appropriations Act, 2017 (P.L. 114–254). The amounts included 

for 2017 reflect the annualized level provided by the continuing 

resolution.

The 2018 Budget 

proposes to remove the 

$5 million earmark for 

accelerating the 

processing of formula 

and label applications. 

E – Legislative Proposals

TTB has no legislative proposals.
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Section II – Annual Performance Plan and Report

A – Strategic Alignment

TTB is responsible for administering and enforcing the sections of the Internal Revenue Code 

associated with the collection of excise taxes on alcohol, tobacco, firearms, and ammunition, and 

the Federal Alcohol Administration Act, which provides for the regulation of the alcohol 

beverage industry for the protection of U.S. consumers. TTB administers its jurisdiction 

according to two strategic goals—“Collect the Revenue” and “Protect the Public”—both of 

which serve to support economic growth and stability. TTB’s strategic goal to collect the 

revenue ensures that the Federal Government has the resources needed to fund national priorities 

and supports Treasury in improving the execution of the tax code. TTB’s strategic goal to protect 

the public ensures that lawful U.S. alcohol businesses are competitive and thriving in the global 

marketplace.

The FY 2018 - 2022 strategic plan is currently under development. The annual performance plan 

will be updated in the FY 2019 Budget to reflect the new priorities.

B – Budget and Performance by Budget Activity

2.1.1 Collect the Revenue Resources and Measures

Dollars in Thousands

Resource Level FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Actuals Actuals Actuals Actuals Actuals Annualized CR Request

Appropriated Resources $50,939 $48,927 $51,721 $50,976 $53,385 $53,458 $49,425

Reimbursable Resources $2,464 $3,277 $3,506 $3,681 $3,143 $3,835 $3,835

Transfer from TEOAF-Super 

Surplus Fund

$0 $0 $468 $0 $0 $0 $0

Budget Activity Total $53,403 $52,204 $55,695 $54,657 $56,528 $57,293 $53,260

Measure FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2016 FY 2017 FY 2018 FY 2012 -

Actual Actual Actual Actual Actual Target Target Target FY 2016

Trend

Activity of Revenue Collected 

Per Program Dollar

449.0 457.0 457.0 437.0 414.0 400.0 400.0 400.0

Percent of Voluntary Compliance 

from Large Taxpayers in Filing 

Tax Payments Timely and 

Accurately (In Terms of 

Revenue)

92.0 92.0 90.0 88.0 87.0 92.0 90.0 90.0

Key: DISC - Discontinued, B - Baseline

Collect the Revenue Budget and Performance

($49,425,000 from direct appropriations, $3,835,000 from reimbursable resources):

This budget activity includes all tax processing, verification, enforcement, and outreach efforts 

related to administering the Federal tax code for alcohol, tobacco, firearms, and ammunition

products. TTB collects approximately $22 billion in Federal tax revenue annually from nearly 

13,000 businesses. TTB’s tax base includes distilleries, breweries, and wineries, which have 

boomed in recent years, as well as manufacturers and importers of tobacco and firearms. TTB 
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extends the reach of its enforcement resources through advanced analytics and risk-based audits 

and investigations. To ensure a level playing field for all those engaged in the trade of these 

strictly regulated commodities, TTB also takes appropriate enforcement action to detect and 

address diversion activity to ensure all products sold in the marketplace are properly taxpaid.

Other Resources (Offsetting Collections/Reimbursables).................................... $3,835,000

Other resources that fund this budget activity include reimbursement for the operating costs of 

the TTB Puerto Rico field office, which are offset against the roughly $400 million in taxes 

collected on the alcohol beverage products that are manufactured in Puerto Rico and imported to

the United States (cover-over payments); reimbursement by the Community Development 

Financial Institutions Fund (CDFI) for TTB’s IT services; and funding from the Department of 

the Treasury’s Executive Office for Asset Forfeiture (TEOAF) mandatory account to cover 

investigative expenses, data systems, and training.

Description of Performance – Collect the Revenue:

TTB’s measures of the Amount of Revenue Collected per Program Dollar and the Percent of 

Voluntary Compliance from Large Taxpayers in Filing Payments Timely demonstrate the 

effectiveness and efficiency with which TTB operates its revenue collection function. TTB’s 

strategies for achieving results for both measures include applying technology to streamline 

internal and external processes and leveraging data sources to direct our outreach and 

enforcement efforts. At the FY 2018 funding level, TTB will review these strategies and their 

timelines to ensure continued effectiveness in tax administration and to ensure resources are 

deployed efficiently to maximize the deterrent effect. 

Improve Efficiency of Tax Collection 

In FY 2016, TTB met this performance measure. The Amount of Revenue Collected per 

Program Dollar measure uses annual collections figures and the actual expenditures and 

obligations for collection activities to quantify the efficiency of the TTB tax collection program. 

In FY 2016, TTB achieved a return on investment of $414 for every program dollar spent on 

collection activities, which exceeded its annual performance target of $400. Tobacco revenues

have steadily declined in line with shifts in consumption patterns, product manufacturing, and 

trade. There was a significant increase in FY 2010 due to the tax increases in 2009, but the longterm trend is downward. 

In setting its FY 2018 performance target, TTB examined historical collections trends across 

each of its regulated commodities, as well as other predictors that influence consumer behaviors.

As illustrated by the below table, the 2009 changes to the Federal tax rates saw increases tobacco 

tax collections in dollar terms but even at the higher tax rate, these collections have generally 

declined each year since then. Accounting for these types of marketplace shifts, TTB established 

a targeted performance level of 400:1 for fiscal years 2017 – 2018. 
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Excise Tax and Other Collections by Fiscal Year

Dollars in Thousands

FAET – Firearms and Ammunition Excise Tax; SOT – Special Occupational Tax; FST – Floor Stocks Tax

In FY 2018, to meet its performance target of $400, TTB will continue to improve efficiencies 

and results in its tax enforcement program through process improvements related to tax 

verification. On the front end, TTB will evaluate and develop options to increase automation in 

the detection, notification, assessment, and collection of excise taxes due to preserve staff time 

for substantive tax analysis. On the back end, TTB will continue to use data analytics and other 

intelligence to efficiently deploy its enforcement resources. 

A primary focus for TTB tax enforcement continues to be exported alcohol and tobacco 

products. In FY 2016, TTB made significant inroads into identifying tax evasion schemes that 

involve the diversion of non-taxpaid products intended for export. In just over two years, TTB’s 

enforcement efforts into the export trade, including tobacco export warehouses that are permitted 

by TTB, have identified over $50 million in additional liabilities to date as well as numerous

criminal cases. 

In future years, TTB will develop a plan to modernize TTB’s tax systems to increase automation 

and improve tax verification and improve its capacity to develop and build risk models that 

support the identification of high-risk activity for audit, investigation, and criminal prosecution.

Increase Voluntary Compliance from Taxpayers

Fostering voluntary compliance among taxpayers is a primary tax administration strategy for 

TTB. The Percent of Voluntary Compliance from Large Taxpayers in Filing Tax Payments 

Timely metric shows the rate of compliance by large taxpayers (i.e., those that pay more than 

$50,000 in annual taxes) in voluntarily filing their tax payments on or before the scheduled due 

date. In FY 2016, TTB achieved a compliance rate of 87 percent from its large taxpayers, which 

fell below the performance target of 92 percent. The declining compliance rate in recent years is 

due to improvements in TTB’s tax reconciliation and enforcement functions related to 

identifying late, missing, and erroneous tax returns and payments. These efforts often result in 

identifying taxpayers who have not filed returns and have not previously been included in the 

compliance rate calculations. Including these taxpayers reduces the calculated compliance rate 

even when TTB succeeds in obtaining overdue returns. TTB anticipates that taxpayers targeted 

by enforcement efforts will begin filing timely returns in future years, and that, combined with 

Fiscal

Year Alcohol Tobacco FAET SOT FST Other Total

2007 $ 7,232,138 $ 7,194,081 $287,835 $ 2,808 $ - $ 32 $ 14,716,894

2008 7,420,576 6,851,705 312,622 448 - 634 14,585,985

2009 7,424,292 11,548,504 452,693 272 1,192,375 970 20,619,106

2010 7,476,789 15,913,479 360,813 300 8,558 180 23,760,119

2011 7,594,330 15,515,073 344,262 268 5,220 2,257 23,461,410

2012 7,856,391 15,002,616 514,622 249 5,942 61 23,379,881

2013 7,851,953 14,321,017 762,836 280 1,521 38 22,937,645

2014 7,924,951 13,552,711 768,927 332 465 2 22,247,388

2015 7,997,467 13,620,497 638,518 288 2,444 7 22,259,221

2016 8,075,476 13,274,371 749,789 258 245 505 22,100,644

Average $ 7,685,436 $ 12,679,405 $519,292 $ 550 $ 121,677 $ 469 $ 21,006,829
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planned enhancements to online guidance, will increase voluntary compliance rates going 

forward.

For FY 2018, TTB has set a performance target of a 90 percent voluntary compliance rate for its 

large taxpayers. TTB will focus on promoting electronic filing options to enable taxpayers to 

file complete, accurate, and timely tax returns and payments; improving online guidance, 

particularly for the large number of newly permitted industry members; and maintaining an 

enforcement presence to encourage voluntary compliance. Moving forward on all three fronts is 

required to ensure that TTB strikes the appropriate balance between supporting new businesses 

in establishing compliant operations while ensuring adequate coverage of the high-risk activity 

that undermines lawful business activity. 

A reduced enforcement presence may diminish the deterrent effect that results in voluntary 

compliance. In addition to fewer audits and investigations, TTB will need to curtail its criminal 

investigations. Since TTB commenced its criminal enforcement program in FY 2011, these 

investigations have resulted in nearly $600 million in tax liabilities (a 4:1 return on investment 

achieved with just a handful of agents) and criminal convictions, which are an essential 

component of tax enforcement. 

2.1.2 Protect the Public Resources and Measures

Dollars in Thousands

Resource Level FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Actuals Actuals Actuals Actuals Actuals Annualized CR Request

Appropriated Resources $48,939 $45,727 $47,279 $47,451 $52,709 $52,779 $49,233

Reimbursable Resources $2,464 $2,670 $3,236 $2,451 $2,577 $3,137 $3,137

Transfer from TEOAF-Super 

Surplus Fund

$0 $0 $432 $0 $0 $0 $0

Budget Activity Total $51,403 $48,397 $50,947 $49,902 $55,286 $55,916 $52,370

FTE 245 241 246 243 246 257 238

Measure FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2016 FY 2017 FY 2018 FY 2012 -

Actual Actual Actual Actual Actual Target Target Target FY 2016

Trend

Percent of Electronically Filed 

Permit Applications (Note 1)

59.0 73.0 80.0 81.0 81.0 87.0 82.0 85.0

Percentage of Permit 

Applications Processed within 

Service Standards

61.0 50.0 58.0 47.0 32.0 85.0 85.0 85.0

Customer Satisfaction Rate 

with TTB Permitting Process

N/A N/A N/A 76.0 71.0 80.0 80.0 80.0

Percent of Electronically Filed 

Label and Formula Applications

88.0 90.0 93.0 94.0 97.0 95.0 95.0 95.0

Percentage of Alcohol 

Beverage Label and Formula 

Applications Processed within 

Service Standards

83.0 49.0 67.0 75.0 75.0 85.0 85.0 85.0

Key: DISC - Discontiued, B - Baseline

Note 1: Reported results revised for FY12–FY15 due to an error identified in the source data for paper-filed original permit 

applications.
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Protect the Public Budget and Performance

($49,233,000 from direct appropriations, and $3,137,000 from reimbursable resources): 

This budget activity funds the programs that ensure the integrity of the products and industry 

members in the marketplace; promote compliance with Federal laws and regulations by the 

approximately 82,000 businesses that TTB regulates; facilitate fair and lawful domestic and 

international trade in the alcohol and tobacco commodities; and provide full and accurate alcohol 

beverage product information to the public as a means to prevent consumer deception. 

Other Resources (Offsetting Collections/Reimbursables).................................... $3,137,000

Other resources that support this budget activity include reimbursement for the operating costs of 

the TTB Puerto Rico field office, which are offset against the roughly $400 million in taxes 

collected on the alcohol beverage products that are manufactured in Puerto Rico and imported 

into the United States (cover-over payments); reimbursement by the Community Development 

Financial Institutions Fund (CDFI) for TTB’s IT services; and funding from the Department of 

the Treasury’s Executive Office for Asset Forfeiture (TEOAF) mandatory account to cover 

investigative expenses, data systems and training.

Description of Performance – Protect the Public:

TTB has five principal performance measures of its public protection activities. These measures 

help TTB monitor the degree to which it is meeting the service standards it establishes for 

permit, label, and formula applications; the impact that electronic filing initiatives are having on 

improved service delivery; and the level of satisfaction that prospective industry members have 

with TTB’s permitting process. TTB’s strategies to achieve its performance targets include 

streamlining internal processes, implementing enhancements to online filing systems, 

modernizing filing requirements, and providing clearer guidance to industry members. At the 

FY 2018 funding level, TTB will review these strategies and their timelines, as well as adjust 

service standards, to set realistic expectations for the businesses that rely on TTB approvals.

Improve Efficiency and Effectiveness of Permitting Process

TTB protects consumers by screening permit applicants to ensure only qualified persons engage 

in the alcohol, tobacco, firearms, and ammunition industries. In FY 2016, TTB processed more 

than 8,500 original permit applications, performing investigations into high-risk applicants to 

meet TTB’s business integrity objective. TTB monitors its timeliness in processing permit 

applications through its measure of the Percentage of Permit Applications Processed within 

Service Standards. As businesses rely on accurate information related to TTB service delivery in 

their operational planning, this measure provides important data related to a key outcome for 

TTB and its stakeholders. In FY 2016, TTB met its 75-day service standard for 32 percent of 

original permit applications, a significant year-to-year decline and well below the 85 percent 

performance target. The increased volume of submissions, particularly in the more complex 

alcohol manufacturing application types, has caused processing times to increase.

Processing times are expected to worsen as the backlog of applications continues to grow, with 

particular challenges resulting from resource levels that have not kept up with industry 

expansion. In FY 2018, TTB will establish a new service standard of 130 days to represent its 

current and projected processing times based on staffing levels. TTB will strive to meet this new 
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standard for 85 percent of permit applications through internal workflow changes and industry 

education efforts to improve submission compliance and, therefore, reduce reprocessing work.

According to its measure of the Percent of Electronically Filed Permit Applications, which tracks 

the e-filing rate for new business applications, TTB has generally reached a plateau in 

performance, with approximately 81 percent of permit applications received via Permits Online. 

Although trending up slightly, this rate reflects marginal gains achieved over the past three years. 

TTB is reviewing its strategies to increase the benefits associated with electronic filing, including 

faster processing times and improved application compliance, and expects improvement on both 

fronts as a result of a major system release planned for the end of FY 2017. These system 

changes, combined with effective online guidance and training, will support TTB in achieving its 

targeted electronic filing rate of 85 percent in FY 2018.

Increase Customer Satisfaction with TTB Service Delivery 

TTB also measures its performance in its permitting function by surveying the businesses that 

apply for a TTB permit. TTB monitors the Customer Satisfaction Rate with TTB’s Permitting 

Process by using an e-mail survey to assess how satisfied businesses are when applying for a

permit through Permits Online. Satisfaction rates in FY 2016 were below the annual target of 80 

percent, with 71 percent of applicants filing for an original permit satisfied with the application 

process, including the level of service received and timeliness of TTB’s response. Satisfaction 

rates have declined year-to-year as processing times have lengthened, and they are expected to 

remain below target until timely service improves. In FY 2018, to achieve its performance target 

of 80 percent, TTB will continue to implement internal workflow improvements to reduce 

processing times. Further, TTB expects the release of a new version of Permits Online to 

increase satisfaction rates by improving system-based guidance as well as overall customer 

experience with the system. TTB will also aim to improve the level of service provided to 

customers seeking live assistance with the permit application process via TTB’s call center, 

although wait times may increase at the FY 2018 staffing levels.

Improve Efficiency and Effectiveness of Alcohol Beverage Label Processing

TTB protects U.S. consumers by ensuring that the alcohol beverage products sold at retail outlets 

are properly labeled and comply with federal production standards. In FY 2016, TTB received 

more than 161,000 label applications and more than 14,500 formula applications, an increase in 

submissions that reflects the ongoing expansion of the alcohol beverage industry. Given the 

importance of timely TTB approvals and the negative impact that delays have on U.S. 

businesses, TTB monitors its ability to provide timely and consistent service through its measure 

of the Percentage of Alcohol Beverage Label and Formula Applications Processed within 

Service Standards. TTB combines label and formula applications in this measure given the 

interdependent nature of these approvals. TTB set a service standard for a label approval at 30 

days and 45 days for a formula approval. 

In FY 2016, TTB met its service standards of 30 days and 45 days approximately 75 percent of 

the time. At these service levels, the majority of wineries, breweries, and distilleries waited three 

months on average from the time they filed for a formula approval to being able to bottle, label,

and distribute a new product. Performance in labeling declined slightly to 76 percent of label 

approvals meeting the 30-day service standard compared to the 80 percent achieved last year.
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TTB met its 45-day service standard for formula applications 63 percent of the time, compared to 

just 15 percent in FY 2015. TTB was able to lift certain filing requirements in areas deemed lowrisk to consumers and the revenue, but industry growth combined with market trends toward 

formulated products have resulted in increased submissions that have offset these reductions. 

TTB has begun to make significant progress to accelerate label and formula processing, and 

remains on track to achieve its performance goal of a 10-day turnaround for label and formula 

applications by the end of FY 2017. This progress was achieved through revised filing 

requirements, updated guidance, and system enhancements, as well as additional staff hired in 

FY 2016 to support performance improvements in the labeling program. 

For FY 2018, TTB will maintain its established target of 85 percent for the percentage of label 

and formula applications that meet the established service standards. However, TTB expects to 

adjust its service standards for both labels and formulas to a 30-day turnaround for FY 2018, 

rather than 10-day turnaround projected for FY 2017, based on projected staffing and the

projected growth in submissions. To meet the performance target, TTB will focus on facilitating 

compliance of initial applications, thus reducing the workload associated with processing

resubmissions. In FY 2018, TTB will focus exclusively on online guidance to improve compliant 

label and formula applications. This strategy is critical to managing the total workload associated 

with label and formula applications, which will be necessary to achieve the performance target. 

TTB also intends to proceed with its labeling modernization project, which will update and 

streamline the labeling regulations to reflect current TTB policy and modern industry practices.

Further, TTB will continue to employ its strategy to increase electronic filing to manage 

workloads and ensure service standards are met. These efforts include improving online and 

system guidance to help industry in filing label and formula applications, focusing on 

streamlining and clarifying communications between TTB and industry members each time a 

label or formula is returned due to application errors or other compliance issues. In FY 2016, 

TTB exceeded its target by achieving a combined electronic filing rate of 97 percent, as tracked 

by its measure of Percent of Electronically Filed Label and Formula Applications. TTB expects 

that these planned improvements will help TTB continue to attract new industry members to its 

online systems and maintain performance above its 95 percent target in FY 2018.
TTB - 15

Section III – Additional Information

A – Summary of Capital Investments

Information Technology

TTB’s Strategic Plan establishes the vision and objectives for the bureau. TTB’s Information 

Technology (IT) Strategic Plan is a five-year plan based on its business strategy, which includes 

the bureau’s mission, vision, goals, and objectives from an IT perspective. This plan charts the 

course the bureau will follow in the coming years to develop and implement IT solutions that are 

aimed at streamlining the collection of data, leveraging web technologies, and making the 

Internet the method of choice for the reporting and exchanging of information. By aligning 

business and technical strategy, TTB is able to leverage technology to enable the bureau to meet 

its objectives in the most efficient and cost-effective manner while identifying ways to minimize 

system redundancy. 

TTB has no major IT investments based on the OMB and the Department of Treasury criteria. 

Several non-major investments, however, directly support the mission, strategy, and day-to-day 

operations of the bureau. These include:

TTB Tax System: This investment consists of several component applications that ensure fair 

and proper collection of revenue from the industry members for alcohol, tobacco, firearms, and 

ammunition excise taxes and to ensure compliance with the excise tax regulations.

TTB Regulatory System: This investment includes applications that streamline the beverage 

and nonbeverage alcohol formula approval process and COLA issuance for tax and regulatory 

compliance.

TTB General Support Services: This investment provides TTB users with the infrastructure 

applications necessary to conduct daily business.

TTB Enterprise Architecture: This investment supports strategic management of IT operations 

(e.g., business process redesign efforts not part of an individual investment, enterprise 

architecture development, capital planning and investment control processes, procurement 

management, and IT policy development and implementation) and costs for Chief Information 

Officer functions.

In addition to leveraging IT to support the mission, strategy, and day-to-day operations of the 

bureau, TTB supports and maintains strategy alignment with OMB and Treasury through 

enterprise-wide IT initiatives. These include: Cyber Security; IT Infrastructure; Electronic 

Identity and Access Management (HSPD-12); Enterprise-wide Contracts and Services; and 

Program Metrics and Milestones.

Scientific Equipment for Laboratories

This investment will enable chemists to provide accurate and reproducible scientific data and 

laboratory results to support regulatory compliance, tax enforcement, tax classification, 

rulemaking, and investigations for both the alcohol and tobacco commodities. Laboratory 

instruments require periodic replacement, as they have finite lifecycles due to use and as 
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scientific advances continue to evolve. Technologies applied at these laboratories eventually 

become obsolete and the instruments are not serviceable as vendors stop carrying parts and 

software. Periodic replacement of the existing technologies is essential for TTB laboratories to 

remain state-of-the-art and effective to support the bureau’s mission, strategy, and day-to-day 

operations.

A summary of capital investment resources, including major information technology and nontechnology investments can be found at:

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.