Alcohol and Tobacco Tax and Trade Bureau 

Program Summary by Budget Activity 

(Dollars in thousands) 

FY 2008 FY 2009 FY 2010 Appropriation Enacted Enacted Request $ Change % Change

Salaries and Expenses $93,515 $99,065 $105,000 $5,935 6.0%

 Collect the Revenue $47,693 $50,523 $52,500 $1,977 3.9%

 Protect the Public $45,822 $48,542 $52,500 $3,958 8.2%

Subtotal, Alcohol and Tobacco Tax and Trade Bureau $93,515 $99,065 $105,000 $5,935 6.0%

Offsetting Collections - Reimbursables $3,755 $5,154 $4,234 ($920) (17.9%)

Total Program Operating Level $97,270 $104,219 $109,234 $5,015 4.6%

Note: The FY 2010 Budget Request includes $80 million in offsetting collections from fee revenues. To the extent that these allocations differ 

from the Budget, the reader should refer to the figures presented in this document. 

Explanation of Request 

 

In FY 2010, the Alcohol Tobacco Tax and 

Trade bureau (TTB) will continue to focus its 

efforts on helping industry members comply 

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 2010 President’s 

budget request enables TTB to continue its 

programs and activities necessary to meet the 

performance measures that support TTB’s 

strategic goals of collecting revenue and 

protecting the public. 

Total resources required to support TTB 

activities for FY 2010 are $109,234,000, and 

552 FTE, including $25,000,000 from direct 

appropriations and $84,234,000 in offsetting 

collections. The offsetting collections include 

$80,000,000 from annual fee receipts, and 

$4,234,000 from other offsetting collections 

and reimbursable programs. 

Purpose of Program 

 

TTB serves as the nation’s primary federal 

authority in the regulation of the alcohol and 

tobacco industries. TTB is responsible for the 

administration and enforcement of two major 

areas of federal law affecting those industries, 

namely: those 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 those engaged in the alcohol 

beverage industry and the protection of 

consumers of alcohol beverages. 

Collect the Revenue - TTB is charged with 

collecting alcohol, tobacco, firearms, and 

ammunition excise taxes. These products 

generate nearly $22 billion in tax revenue 

annually, making TTB the third largest tax 

collection agency in the federal government. 

Alcohol and tobacco taxes collected by TTB 

are remitted to the Department of the Treasury 

General Fund. Firearms and ammunition 

excise taxes are remitted to the Fish and 

Wildlife Restoration Fund under provisions of 

the Pittman-Robertson Act of 1937. 

 

The excise taxes collected by TTB come from 

taxes imposed and collected at the producer 

and importers level of operations. Members of 

the regulated industries paying excise taxes are 

distilleries, breweries, bonded wineries, 

bonded wine cellars, manufacturers of paper 

and tubes for tobacco products, manufacturers 

of tobacco products, and manufacturers and 

importer of firearms and ammunition. About 

200 of the largest taxpayers account for 98 

Department of the Treasury - Budget in Brief FY 2010 Page 41
percent of the annual excise tax collected. In 

FY 2008, the majority of taxes collected were 

from tobacco (49 percent) and alcohol (49 

percent), with the remainder from firearms and 

ammunition (2 percent). 

Strategies used to collect the revenue rightfully 

due are identifying any gaps in tax payment, 

identifying any illegal entities or individuals 

operating outside the excise tax system, 

developing a balanced field approach of audits 

and investigations that target non-compliant 

industry members, and establishing an 

identifiable presence within all of industry that 

encourages voluntary compliance. 

Protect the Public - TTB works to ensure the 

integrity of the alcohol and tobacco industries 

and of beverage alcohol products found in the 

marketplace, and regulates roughly 46,200 

alcohol and tobacco businesses. Under this 

activity, TTB enforces Federal laws related to 

the issuance of permits to industry members 

and the production, labeling, advertising, and 

marketing of alcohol products. TTB conducts 

these activities through investigations, 

application reviews, laboratory testing, and 

educational programs. TTB works with 

industry, foreign and state governments, and 

other interested parties to make it easier to 

comply with regulatory requirements and 

maintain the appropriate level of oversight to 

ensure public safety. Education, partnerships, 

and open communication are paramount 

strategies in facilitating compliance with 

regulatory requirements 

TTB FY 2010 Budget Highlights

(Dollars in thousands) 

Appropriation Amount

FY 2009 Enacted 99,065

Changes to Base: 

Base Realignment: $0

Base Realignment from Collect the (990)

Revenue 

Base Realignment to Protect the Public 990

Maintaining Current Levels (MCLs): 

Across the Board Program Reduction (1,556)

Pay Annualization 556

 Pay Inflation Adjustment 1,014 

Non-Pay Inflation Adjustment 421

Subtotal FY 2010 Changes to Base $435

Total FY 2010 Base 99,500

Program Changes: 

Program Increases: $5,500

Annual Licensing and Registration Fee 5,500

Program 

Subtotal FY 2010 Program Changes $5,500

Total FY 2010 President's Budget Request 105,000

 Annual Fees (80,000)

Total FY 2010 President's Budget Request 

(Net)

25,000

FY 2010 Budget Adjustments 

 

FY 2009 Enacted 

The FY 2009 enacted direct appropriation for 

TTB is $99,065,000. 

Base Realignment 

Base Realignment from Collect the 

Revenue -$990,000 / +0 FTE Realignment of 

funds from the Collect the Revenue budget 

activity 

Base Realignment to Protect the Public 

+$990,000 / +0 FTE Realignment from Collect 

the Revenue to Protect the Public. 

Maintaining Current Levels (MCLs) 

Adjustments Necessary to Maintain 

Current Levels +$435,000 / +0 FTE Funds 

are requested for: Across the Board Reduction 

of $1,556,000; FY 2010 cost of the January 

2009 pay increase of $556,000; proposed 

January 2010 pay raise of $1,014,000; nonlabor related items such as contracts, travel, 

supplies, equipment and GSA rent adjustments 

of $421,000 

Department of the Treasury - Budget in Brief FY 2010 Page 42
Program Increases 

Annual Licensing and Registration Fee 

Program +$5,500,000 / +12 FTE Funds are 

needed to implement the proposed legislation 

designed to establish a permanent program for 

FY 2010 and each fiscal year thereafter, 

requiring the payment of annual fees from 

alcohol industry members. The $5.5 million in 

program costs are principally recurring costs, 

and will cover labor and other program 

operating costs. This program will conduct 

key business activities including the mailing 

and processing of returns, issuance of non 

compliance letters, maintaining a client 

registry, responding to customer inquiries, 

along with processing of collections and 

accounting for the revenues. 

Adjustments to Request 

Special Receipts (Annual Fees) -

$80,000,000 / -410 FTE Special Receipts 

(Annual Fees) 

Explanation of Budget Activities 

 

Salaries and Expenses 

Collect the Revenue ($12,500,000 from 

direct appropriations, $40,000,000 from 

special fund receipts (annual fees), and 

$2,117,000 from reimbursable programs)

The FY 2010 President’s Budget request is 

$12,500,0002

 from direct appropriations, 

$40,000,000 from offsetting collections 

(annual fees) and $2,117,000 from 

reimbursable programs, for a total operating 

level of $54,617,000. The Collect the 

Revenue activity works toward providing the 

most effective and efficient systems for the 

collection of tax revenue, eliminating or 

preventing tax evasion and other criminal 

conduct, and providing high quality service 

while imposing the least regulatory burden on 

 

2

 The allocation of appropriated resources presented in 

the President’s Budget has been updated in this 

document. To the extent that these allocations differ 

from the Budget, the reader should refer to the figures 

presented in this document.

taxpayers. This program includes projects 

designed to allow taxpayers to report and pay 

excise taxes electronically. 

Protect the Public ($12,500,000 from direct 

appropriations, $40,000,000 from special 

fund receipts (annual fees), and $2,117,000 

from reimbursable programs) The FY 2010 

President’s Budget request is $12,500,000 

from direct appropriations, $40,000,000 from 

offsetting collections (annual fees) and 

$2,117,000 from reimbursable programs, for a 

total operating level of $54,617,000. The 

Protect the Public activity ensures the integrity 

of products and industry members in the 

marketplace, ensures compliance with laws 

and regulations by regulated industries, and 

provides information to the public as a means 

to prevent consumer deception. Under this 

activity, TTB enforces compliance with 

federal laws related to the issuance of permits 

to industry members and the production, 

importation, exportation, labeling, advertising, 

and marketing of alcohol products. TTB 

conducts investigations, application reviews, 

laboratory testing, and educational programs in 

support of its mission. 

Legislative Proposals 

 

Extend Pay Demonstration Program for one 

additional year: TTB proposes to continue the 

Pay Demonstration Program by amending the 

General Provision language to extend the 

program for one additional year.

Annual Licensing and Registration Fee 

Program: Legislation will be proposed to 

allow TTB to establish a permanent program 

for FY 2010 and for future fiscal years 

requiring the payment of annual fees from its 

industry members. In the first year, the annual 

estimated offsetting fee collections will be 

less, but it is anticipated that the annual 

collections from this program will reach $105 

million each year thereafter. In general, these 

fees will support the Bureau’s core mission 

Department of the Treasury - Budget in Brief FY 2010 Page 43
and the funds will be used to continue to 

provide benefits to retailers, wholesalers, 

breweries, wineries, distilleries, and industrial 

alcohol businesses. In particular, TTB’s 

efforts help ensure that alcohol products are 

not contaminated, misbranded, illegally 

marketed, and prevent dishonest persons from 

entering into the alcohol distribution system. 

This promotes fair competition among all 

industry members. Regulation of these 

industries also protects the public against 

adulterated alcohol products, and misleading 

labels and advertisements. 

TTB Performance by Budget Activity 

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Budget Activity Performance Measure Actual Actual Actual Target 

Met? Target Target

Collect the Revenue Amount of revenue collected per program 

dollar (E) 

N/A N/A 313 Yes 300 260 

Collect the Revenue Percentage of Voluntary Compliance from 

large tax payers in filing tax payments 

timely and accurately (in terms of 

revenue) (Oe) 

N/A N/A 94 Yes 92 92 

Protect the Public Percent of electronically filed Certificate of 

Label Approval applications (%) (E) 

38 51 62 Yes 53 54 

Protect the Public National Revenue Center (NRC) 

customer satisfaction results (Oe) 

N/A N/A 90 Yes 85 85 

Protect the Public Average number of days to process an 

original permit application at the National 

Revenue Center (E) 

N/A N/A 64 Yes 72 78 

Protect the Public Percentage of importers identified by TTB 

as illegally operating without a Federal 

permit (%) 

N/A N/A 22 N/A 20 19 

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and M - Management/Cust. Satisfaction 

 

Description of Performance 

 

The Bureau continues to collect the federal 

excise taxes in a highly efficient manner, 

and continues to help industry members 

comply with alcohol and tobacco laws and 

regulations. During FY 2008, TTB met all 

of its performance goals, while showing 

continued improvements in performance 

scores. The Bureau plans to continue to 

monitor its performance, and will continue 

to capture performance information on 

program operations to both measure and 

improve the effectiveness of its operation. 

The investments in the Collect the Revenue 

Activity resulted in the following 

performance highlights and 

accomplishments during 

FY 2008: 

• Collected $14.6 billion in excise taxes, 

interest, and other revenues from 

alcohol, tobacco, firearms, and 

ammunition industries from 8,500 excise 

taxpayers holding permits. 

• Expanded the e-filing program to allow 

all excise taxpayers to file and pay taxes, 

and file monthly operational reports, 

electronically through the Pay.Gov 

system. The number of Pay.gov 

registrants is over 3,600. 

• Processed $373 million in cover-over 

payments to Puerto Rico and $8 million 

to the Virgin Islands. Federal excise 

taxes collected on rum produced in 

Department of the Treasury - Budget in Brief FY 2010 Page 44
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 Virgin Islands. 

• Processed $283 million in drawback 

claims. Under current law, persons who 

use non-beverage alcohol in the 

manufacture of medicines, food 

products, flavors, extracts, or perfume 

and other non-potable products may be 

eligible to claim drawback of excise 

taxes paid on distilled spirits used in 

their products. The TTB laboratory 

analyzes and approves a product formula 

before a company can manufacture a 

product and file a claim. 

The investments in Protect the Public 

Activity have resulted in the following 

performance highlights and 

accomplishments during 

FY 2008: 

• Processed 133,427 Certificate of Label 

Approval (COLAs) applications through 

the bureau’s COLAs Online system for 

electronic filing of label applications. 

The number of electronic filed 

applications increased from the prior 

year from fifty one percent to sixty two 

percent. The Federal Alcohol 

Administration Act requires importers 

and bottlers of alcoholic beverages to 

obtain a COLA prior to introduction of 

the product into commerce. 

• Issued 4,600 original permits and 

approved 21,400 amended permits and 

related correspondence. TTB issues 

original and amended permits to persons 

who are engaged in the alcohol and 

tobacco industries. Illicit activity in 

these industries has the potential to be 

highly lucrative so it is crucial that 

organized crime and terrorists are kept 

out of these industries. 

• Conducted more than 900 field 

application investigations of industry 

members regarding applications, 

consumer complaints, tax fraud, trade 

practice violations, and product and 

labeling integrity verifications. 

Department of the Treasury - Budget in Brief FY 2010 Page 45