Department of the Treasury – Budget in Brief

Alcohol and Tobacco Tax and Trade Bureau

Program Summary by Budget Activity

Dollars in Thousands

 FY 2016 FY 2017 FY 2018 FY 2017 TO FY 2018

Budget Activity Enacted Annualized CR Request $ Change % Change

Collect the Revenue $52,785 $53,458 $49,425 ($4,034) -7.55%

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

Subtotal, TTB $106,439 $106,237 $98,658 ($7,579) -7.13%

Offsetting Collections - Reimbursables $6,992 $6,972 $6,972 ($0) -00.00%

Total Program Operating Level $113,431 $113,209 $105,630 ($7,579) -6.69%

Direct FTE 470 494 456 (38) -7.69%

Reimbursable FTE 10 10 10 0 0.00%

Total FTE 480 504 466 (38) -7.54%

Summary

The Alcohol and Tobacco Tax and Trade 

Bureau (TTB) serves as the Nation’s primary 

Federal authority in the taxation and regulation 

of the alcohol and tobacco industries. TTB is 

responsible for the administration and 

enforcement of the Internal Revenue Code 

associated with the collection of excise taxes 

on alcohol, tobacco, firearms, and 

ammunition, and the Federal Alcohol 

Administration (FAA) Act, which provides for 

the regulation of the alcohol beverage industry 

to protect U.S. consumers and ensure a fair 

and competitive marketplace for U.S. 

businesses.

In FY 2018, TTB will continue to focus its 

efforts on enforcing compliance with alcohol, 

tobacco, firearms, and ammunition laws and 

regulations in the interest of collecting all 

appropriate excise taxes and promoting a 

marketplace for alcohol beverages that 

complies fully with Federal production, 

labeling, advertising, and marketing standards. 

The FY 2018 President’s Budget request 

enables TTB to continue the programs and 

activities necessary to meet its strategic goals 

of collecting revenue and protecting the 

public.

Total resources required to support TTB

activities for FY 2018 are $105,630,000, 

including $98,658,000 from direct 

appropriations, and $6,972,000 from other 

offsetting collections and reimbursable 

programs.

TTB FY 2018 Budget Highlights

Dollars in Thousands

Alcohol and Tobacco Tax and Trade Bureau 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)

Total FY 2018 Request 456 $98,658
Department of the Treasury – Budget in Brief

FY 2018 Budget Adjustments

Adjustments to Request

Maintaining Current Level (MCLs)

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.

Non-Pay +$860,000 / +0 FTE

Funds are requested for non-labor expenses 

such as travel, contracts, rent, supplies and 

equipment.

Efficiency Savings

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 Decreases

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, 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

coincide with 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 the essential 

maintenance of existing systems. 

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. TTB will prioritize the criminal 

case pipeline to ensure effective case 

management and resolution.

Explanation of Budget Activities

Collect the Revenue ($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 excise tax on alcohol, tobacco, 

firearms, and ammunition products. TTB 

regulates and collects taxes from distilleries, 

breweries, bonded wineries, bonded wine 

cellars, manufacturers of cigarette papers and 

tubes, manufacturers of tobacco products, and 

manufacturers and importers of firearms and 

ammunition. In ensuring a level playing field 

for all those engage in the trade of these 

strictly regulated commodities, TTB also takes

appropriate enforcement action to detect and 

address diversion activity and ensure all 

products sold in the marketplace are properly 

taxpaid. In FY 2016, TTB collected excise 

taxes totaling $13 billion for tobacco products, 
Department of the Treasury – Budget in Brief

$8 billion for alcohol beverage products, and 

$750 million for firearms and ammunition. 

Protect the Public ($49,233,000 from direct 

appropriations, $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 by 

promoting compliance with Federal alcohol 

and tobacco laws and regulations by the 

approximately 82,000 businesses that hold a 

TTB permit or registration. This budget 

activity supports TTB’s strategic goal of 

ensuring that alcohol and tobacco industry 

operators meet permit qualifications, and 

alcohol beverage products comply with 

Federal production, labeling, and marketing 

requirements.

Legislative Proposals

TTB has no legislative proposals.

TTB Performance Highlights

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

FY 2014 –

FY 2016

Budget Activity Performance Measures Actual Actual Actual Target Target Trend

Collect the Revenue Activity of Revenue Collected Per 

Program Dollar 457.0 437.0 414.0* 400.0 400.0

Collect the Revenue

Percent of Voluntary Compliance from 

Large Taxpayers in Filing Tax Payments 

Timely and Accurately (In Terms of 

Revenue)

90.0 88.0 87.0 90.0 90.0

Protect the Public Percent of Electronically Filed Permit 

Applications (Note 1) 80.0 81.0 81.0 82.0 85.0

Protect the Public Percentage of Permit Applications 

Processed within Service Standards 58.0 47.0 32.0 85.0 85.0

Protect the Public Customer Satisfaction Rate with TTB 

Permitting Process B 76.0 71.0 80.0 80.0

Protect the Public Percent of Electronically Filed Label and 

Formula Applications 93.0 94.0 97.0* 95.0 95.0

Protect the Public

Percentage of Alcohol Beverage Label 

and Formula Applications Processed 

within Service Standards

67.0 75.0 75.0 85.0 85.0

Key: DISC - Discontinued, B - Baseline

*Exceeded FY16 target

Note1: Reported results revised for FY14–FY15 due to an error identified in the source data for paper-filed original permit 

applications.

Description of Performance

The bureau continues to collect the Federal 

excise taxes due on its regulated commodities 

in a highly efficient manner, and continues to 

enforce compliance with alcohol and tobacco 

laws and regulations. During FY 2016, TTB 

met two out of seven of its targeted

performance goals, and made substantial

progress in its initiatives intended to improve 

performance in all other performance metrics. 

The bureau will continue to monitor its annual 

business plan and use performance 

information to improve the effectiveness of its 

programs.
Department of the Treasury – Budget in Brief

The investments in the Collect the Revenue 

activity resulted in the following performance 

highlights and accomplishments during 

FY 2016:

• TTB collected $22 billion in excise taxes 

and other revenues from nearly 13,000

taxpayers in the alcohol, tobacco, firearms, 

and ammunitions industries. The return on 

investment for the Collect the Revenue 

program was $414 for every $1 expended 

on collection activities, exceeding the 2016 

target of $400.

• Since 2011, TTB’s criminal enforcement 

program has opened a total of 105 cases, 

with identified liabilities of over $591 

million in estimated alcohol, tobacco, 

firearms, and ammunition excise taxes and 

approximately $124 million in criminal 

seizures. Further, TTB has maintained a 

100 percent conviction rate on cases fully 

resolved through the legal system.

• TTB completed approximately 400 audits, 

examinations, and revenue investigations, 

which contributed to the identification of 

additional tax revenue of more than $85

million.

• TTB processed $425 million in cover-over 

payments to Puerto Rico and the U.S. 

Virgin Islands. Federal excise taxes 

collected on rum produced in Puerto Rico 

and the Virgin Islands that are 

subsequently imported into the United 

States are “covered-over,” or paid into the 

treasuries of Puerto Rico and the U.S. 

Virgin Islands.

• TTB processed $356 million in drawback 

claims. Under current law, persons who 

use nonbeverage alcohol in the 

manufacture of medicines, food products, 

flavors, extracts, or perfume and other nonpotable products may be eligible to claim 

drawback of excise taxes paid on distilled 

spirits used in their products.

The investments in the Protect the Public 

Activity resulted in the following performance 

highlights and accomplishments during 

FY 2016:

• TTB processed more than 161,000

Certificate of Label Approvals (COLAs) to 

ensure compliance with the FAA Act 

provisions that prevent consumer 

deception. TTB also achieved a 97 percent 

electronic filing rate for alcohol beverage 

label and formula applications above the 

target of 95 percent. Federal law prohibits 

the import or domestic bottling of an 

alcohol beverage without an approved 

COLA, making this TTB service integral 

to U.S. business operations.

• TTB issued approximately 6,250 Federal 

permits, primarily to new alcohol beverage 

producers, importers, and wholesalers. A 

TTB permit or registration is required 

before a business can lawfully operate in 

the alcohol and tobacco industries. TTB

ensures a fair and lawful marketplace and 

protects consumers by screening permit 

applicants to ensure only qualified persons 

engage in operations in the alcohol and 

tobacco industries.

• TTB completed more than 430 field 

investigations of industry members in the 

areas of permit qualification, consumer 

complaints, trade practice violations, and 

product integrity verifications, all of which 

serve the bureau’s dual mission of revenue 

collection and consumer protection.