Alcohol and Tobacco Tax and Trade Bureau 

Program Summary by Budget Activity 

Dollars in Thousands FY 2021 FY 2022 FY 2023 FY 2022 to FY 2023 

Budget Activity Operating 

Plan1

Annualized 

CR Request $ Change % Change 

Collect the Revenue $57,526 $57,526 $77,821 $20,295 35.28% 

Protect the Public $66,811 $66,811 $73,042 $6,231 9.33% 

Subtotal, TTB $124,337 $124,337 $150,863 $26,526 21.33% 

Reimbursable and Offsetting Collections2 $7,072 $7,880 $7,880 $0 0.00% 

Unobligated Balances from Prior Years3 $4,611 $4,824 $4,450 ($374) -7.75% 

Transfers In/Out 4/ $1,087 $838 $0 ($838) NA 

Total Program Operating Level $137,107 $137,880 $163,194 $25,314 18.36% 

Direct FTE 487 508 548 40 7.87% 

Reimbursable FTE 14 12 12 0 0.00% 

Total Full-time Equivalents (FTE) 501 520 560 40 7.69% 1

FY 2021 Resources by Budget Activity reflect levels appropriated in P.L. 116-260, the Consolidated Appropriations Act of 2021. FY 2021 

Full-time Equivalents (FTE) and FY 2021 Other Resources reflect actuals. 

2

Includes reimbursements from the Treasury Executive Office of Asset Forfeiture (TEOAF) Mandatory Fund, Community Development 

Financial Institution (CDFI) Fund, and Treasury Departmental Offices; and offsetting collections from Puerto Rico Cover-Over Program. 3

All years include carryover of prior two-year set aside funding for trade practice enforcement and recoveries of 50 percent in unobligated 

balances from prior one-year funding. 

4

Actual obligations (FY 2021) and approved allocation (FY 2022) from TEOAF Secretary's Enforcement Fund & Strategic Support transfers. 

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 (IRC) provisions for 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 ensures a fair and competitive marketplace for U.S. businesses. 

The economic impact of COVID-19 is still reverberating across U.S. communities, including for 

many of the small breweries, wineries, and distilleries that comprise the majority of TTB 

taxpayers. In FY 2023, in support of the Administration’s economic recovery and growth 

priorities, TTB plans to focus on timely service levels and facilitating voluntary compliance by 

simplifying tax and regulatory requirements, issuing clear and timely industry guidance, and 

modernizing its online filing systems. 

At the FY 2023 funding level, TTB will continue to make critical investments in online filing 

systems as part of its multi-year information technology (IT) modernization strategy to develop 

an integrated online experience for all tax and regulatory transactions with TTB. By improving 

the ease and usability of its online platforms, TTB aims to increase electronic submissions, 

improve timely filings, and support taxpayer compliance. Reducing paper submissions also 

supports “green” filing practices in line with the Administration’s climate change agenda. 

Additionally, in FY 2023, TTB’s mission will expand to include a new import claims program. 

The Craft Beverage Modernization Act (CBMA), as amended, transfers jurisdiction for importrelated provisions from U.S. Customs and Border Protection (CBP) to Treasury as of January 1, 
2023. Treasury intends for TTB to administer the new CBMA import claims program. TTB is 

taking a data-driven and risk-based approach to stand up the new claims program to provide 

importers the CBMA tax benefits. The FY 2023 request supports the development and 

maintenance of custom IT modules for foreign producers and importers to enable online filing 

and processing of claims, as well as additional tax administration and enforcement staff 

necessary to timely issue refunds. 

Budget Highlights 

Dollars in Thousands 

 FTE Amount 

FY 2022 Annualized CR 508 $124,337 

Changes to Base: 

2023 Maintaining Current Levels (MCLs): 0 $4,604 

Pay Annualization (2.7% average pay raise) 0 $572 

Pay Raise (4.6% average pay raise) 0 $2,942 

Non-Pay 0 $1,090 

Other Adjustments: 0 $6,993 

Adjustments to meet Current Operating Levels 0 $6,993 

Subtotal Changes to Base 0 $11,597 

FY 2023 Current Services 508 $135,934 

Program Changes: 

Program Increases: 40 $14,929 

CBMA Import Claims 40 $14,929 

FY 2023 President's Budget Request 548 $150,863 

Budget Adjustments 

Adjustments to Request 

Maintaining Current Level (MCLs)............................................+$4,604,000 / +0 FTE 

Pay Annualization (2.7%) +$572,000 / +0 FTE 

Funds are requested for annualization of the January 2022 2.7% average pay raise. 

Pay Raise (4.6% in 2023) +$2,942,000 / +0 FTE 

Funds are requested for a 4.6% average pay raise in January 2023. 

Non-Pay +$1,090,000 / +0 FTE 

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

equipment. 

Other Adjustments............................................................+$6,993,000 / +0 FTE 

Adjustments to meet Current Operating Levels, +$6,993,000 / +0 FTE 

Treasury requests adjustments to meet current services operating levels. Current Operating 

Levels include the annualization of the January 2021 1.0% average pay raise, 2.7% average pay 

raise in January 2022, FY 2022 FERS Contribution Increases, and FY 2022 non-labor expenses. 

 
Program Increases...............................................................+$14,929,000 / +0 FTE

CBMA Import Claims, +$14,929,000 / + 40 FTE 

TTB is requesting $14.9 million and 40 FTE to implement and administer CBMA provisions 

related to imported alcohol. Starting in January 2023, alcohol beverage importers will no longer 

be eligible for the CBMA tax benefits at the time of entry; rather, importers will be required to 

pay the full tax rate at entry and submit quarterly refund claims to TTB to receive the benefits. 

TTB anticipates that this program will roughly double its current claims workload, estimating 

that importers will submit approximately 7,000 claims per year for roughly $250 million in 

refunds. 

TTB requires additional resources to implement and administer the new import claims program 

so that current services and operations are not disrupted. This investment funds the full-year cost 

for the program, including: 

• IT Systems and Support, + $5,500,000 / +0 FTE 

TTB plans to develop two online modules that will enable TTB to receive import claims and 

foreign producer assignments electronically as well as develop automated validations for 

these claims. 

• Foreign Producer Registration & Import Claims and Bond Processing, +$3,386,000 / +22 

FTE 

TTB requests additional staff to process foreign producer registrations, importer claims, and 

related submissions. 

• Enforcement and Risk Analysis, +$4,536,000 / +11 FTE 

TTB plans to develop risk-targeting tools to identify ineligible or fraudulent claims for 

review and field enforcement. TTB will also acquire new data sets to improve and maintain 

visibility into controlled groups. 

• Regulations and Guidance, +$1,009,000 / +5 FTE 

TTB requests additional staff to develop implementing regulations and industry guidance and 

to educate industry stakeholders on new requirements. 

• Administrative Support, +$498,000 / +2 FTE 

TTB requests additional administrative support to address human resources-related needs. 

Legislative Proposals 

TTB has no legislative proposals. 
Performance Highlights FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 

Budget Activity Performance Measure Actual Actual Actual Target Target 

Collect the Revenue Amount of Revenue Collected Per 

Program Dollar ($) 339 380 375 I I 

Collect the Revenue Voluntary Compliance from Large 

Taxpayers - Overall (%) 91 91 93 95 95 

Collect the Revenue By Payment 99 99 99 - - 

Collect the Revenue By Tax Return 84 84 87 - - 

Collect the Revenue By Operational Report 83 83 87 - - 

Collect the Revenue Electronically Filed Tax Returns - 

Pay.gov (%) 41 43 48 60 65 

Collect the Revenue Electronically Filed Operational 

Reports - Pay.gov (%) 42 46 50 60 65 

Collect the Revenue Claims Processed within Service 

Standard (30-45 days) (%) 1/ 71 85 85 

Protect the Public Permit Applications Processed within 

Service Standards (75 days) (%) 58 84 92 85 85 

Protect the Public 

Alcohol Beverage Label and Formula 

Applications Processed within Service 

Standards (15 days) (%) 2/ 

48 83 92 85 85 

Protect the Public Initial Error Rate for Permit 

Applications (%) 71 62 67 25 25 

Protect the Public Initial Error Rate for Label and 

Formula Applications (%) 37 34 31 25 25 

Protect the Public Electronically Filed Permit 

Applications (%) 89 92 95 95 95 

Protect the Public Electronically Filed Label and 

Formula Applications (%) 99 99 100 I I 

Protect the Public Customer Satisfaction Rate with eGov 

Systems - Permits Online (%) 68 78 79 80 80 

Protect the Public Customer Satisfaction Rate with eGov 

Systems - COLAs Online (%) 77 80 83 80 80 

Protect the Public Customer Satisfaction Rate with eGov 

Systems - Formulas Online (%) 3/ 70 73 80 80 80 

Key: I – Indicator 

1/ Includes current tax claim types, including drawback claims from manufacturers of nonbeverage products (30-day service standard) and all 

other claims (45-day service standard); in FY 2023, TTB will modify the measure to include CBMA import claims. 

2/ Service standards are set annually based on TTB analysis of submission volume, error rates, and resource levels. In FY 2018, following a 

spike in submission volume, TTB established service standards of 15 days for both labels and formulas; these standards have remained in effect 

through FY 2021. 

3/ Results represent beverage alcohol filers only (nonbeverage alcohol formula submissions are excluded). 

Description of Performance 

In FY 2021, TTB met or exceeded the performance targets for 10 of its 15 performance 

measures. TTB also monitored performance through several key indicators that support datadriven decision making across TTB’s strategic goals. Across its performance measures, TTB 

made substantial improvements in FY 2021 in key service and operational measures, with most 

exceeding target or trending in a positive direction by year-end, demonstrating TTB’s effective 
strategies to drive improved service and compliance across the industries that TTB regulates. To 

meet its performance goals in FY 2023, TTB will implement an aggressive strategic agenda that 

integrates policy updates, process improvements, and modern technology, as well as data-driven 

outreach and enforcement. 

TTB’s Collect the Revenue 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. In ensuring a level playing field for those engaged in the trade of 

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

address tax evasion and fraud to ensure all products sold in the marketplace are properly taxpaid. 

In 

FY 2021, TTB collected excise taxes totaling $20.3 billion, comprised of $10.8 billion for 

tobacco products, $8.4 billion for alcohol beverage products, and $1.1 million for firearms and 

ammunition. 

The investments in the Collect the Revenue activity resulted in the following performance 

highlights and accomplishments during FY 2021: 

 TTB collected $20.3 billion in excise taxes and other revenues from a tax base of nearly 

37,000 taxpayers in the alcohol, tobacco, firearms, and ammunitions industries. In FY 2021, 

TTB returned $375 for every dollar invested in its tax collection activities. 

 Electronically filed tax returns and operational reports trended positively in FY 2021, 

although still roughly half of TTB tax submissions are submitted to TTB via Pay.gov, the 

current online system for electronic submissions. High rates of paper filings make 

compliance monitoring and fraud detection more difficult and costly, and have a higher 

environmental impact. The IT system modernization investment requested for FY 2023 will 

support system improvements that will drive increased electronic tax filing rates, and should 

result in more accurate, timely, and complete submissions as well as improved access to data 

for tax verification. 

 TTB made progress in reversing the declining filing compliance trend for its large taxpayers, 

defined as those with $50,000 or more in annual tax liability. Given the revenue exposure, 

TTB set a high target for filing compliance for its largest taxpayers at 95 percent. In 

FY 2021, TTB achieved an overall compliance rate of 93 percent from its large taxpayers in 

meeting all tax filing requirements, up from 91 percent last year. Payment compliance rates 

remained high, at over 99 percent, indicating that the majority of reported liabilities are paid 

on time. Compliance rates for both tax returns and operational reports increased to 87 

percent, up roughly 3-4 percent over last year. These filings provide important information 

for tax verification and fraud detection, and require continued focus to improve compliance 

through FY 2023. Late filings represent a significant portion of the compliance violations, 

and TTB plans to focus on effective strategies to address non-compliance that undermines 

the level playing field – particularly critical for the small producers who comprise the 

majority of TTB taxpayers. The FY 2023 request supports the IT system and analytics 

enhancements that would enable TTB to more efficiently detect and address these issues. 

 Additionally, in FY 2023, TTB’s mission will expand to include a new import claims 

program. CBMA, as amended, transfers jurisdiction for import-related provisions from CBP 

to Treasury as of January 1, 2023. TTB is taking a data-driven and risk-based approach to 

administer the new claims program to provide importers with CBMA tax benefits. 
The FY 2023 funding supports the development and maintenance of custom IT modules for 

foreign producers and importers to enable online filing and processing of claims, as well as 

additional tax administration and enforcement staff necessary to timely issue refunds. TTB is 

adding a new measure of claims processed within service standards to monitor its ability to 

timely issue refund claims across all claims types. TTB’s ability to quickly and accurately 

issue tax refunds fills a critical business need, particularly for those potentially experiencing 

cash flow issues during the pandemic. TTB’s service standards for drawback claims by 

manufacturers of nonbeverage products is 30 days; the service standard for all other claims is 

45 days. CBMA import claims will be included beginning in FY 2023. In FY 2021, in 

baselining this new measure, TTB met its respective service standards for 71 percent of 

claims submissions. Going forward, TTB plans to continue focusing on process and IT 

system enhancements to support efficient claims filing and processing, with the aim of 

improving service levels and preventing potential service disruptions due to the anticipated 

influx of CBMA import claims. 

TTB’s Protect the Public 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 more than 111,000 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. 

The investments in the Protect the Public activity resulted in the following performance 

highlights and accomplishments during FY 2021: 

 TTB received over 195,000 label applications and 28,000 formula applications for new 

alcohol and beverage product approvals. Federal law prohibits the import or domestic 

bottling of an alcohol beverage without an approved Certificate of Label Approval (COLA), 

making this service integral to U.S. businesses and economic recovery priorities. Even as 

submission volume increased to at or above pre-COVID levels, TTB performance improved 

in FY 2021. TTB ended the year at 93 percent of label applications meeting the 15‐day 

service standard, exceeding its 85 percent target. This was achieved through effective 

monitoring and management of the application backlog combined with strategic workforce 

deployment in response to submission fluctuations. By employing similar strategies, TTB 

was also able to overcome significant increases in formula submissions to meet the 15-day 

standard for 92 percent of formula applications, also exceeding its 85 percent target. 

 TTB received approximately 8,300 applications for a Federal permit or registration, and 

qualified approximately 7,100 new businesses, predominantly small businesses. A TTB 

permit or registration is required before a business can lawfully operate in the alcohol and 

tobacco industries, and TTB ensures a fair and lawful marketplace by screening permit 

applicants to ensure only qualified persons engage in operations. In FY 2021, TTB made 

significant advances in its priority performance goal to timely issue permits to qualified 

applicants. With submission volume down, and through continued process improvements, 

TTB was able to reduce backlogs and accelerate service levels. Across permit types, TTB 

reduced average approval times to 34 days in FY 2021, down 65 percent since TTB 

established its priority goal in FY 2018. Additionally, TTB surpassed its priority goal target 

to issue permits within the 75-day service standard for 85 percent of applicants, achieving 92 
percent by year-end. TTB achieved these performance improvements using new analytic 

tools to support more effective workload management and oversight. 

 TTB made significant progress in reducing the error rate on initial permit, label, and formula 

applications, a critical strategy to maintaining timely service, although performance remains 

well above the targeted rate of 25 percent, at 67 percent for permit applications and 31 

percent for label and formula applications. Improvements in FY 2021 were driven by system 

enhancements and online guidance, as well as internal training, and guided by ongoing 

analysis of high frequency errors. Performance in permitting is expected to continue to 

improve following recent enhancements to the Permits Online system and completion of 

planned rulemakings to implement broader changes to TTB permit applications. At the 

FY 2023 funding level, TTB will also continue to pursue system-based validations and user 

guidance to reduce label and formula application errors. 

 System enhancements to date have resulted in high rates of customer satisfaction with TTB's 

eGov systems. TTB monitors user satisfaction with the process of submitting an application 

through its eGov systems, collecting responses via e-mail survey to assess factors such as 

ease of access, guidance, and overall experience. In FY 2021, satisfaction rates increased, 

from 80 percent to 83 percent for COLAs Online users and 73 percent to 80 percent for 

Formulas Online users. TTB attributes these increases in part to reduced processing times, 

and anticipates that performance will continue to improve through FY 2023 in line with 

timely service levels. Further, TTB expects that planned system improvements funded at the 

FY 2023 request level, combined with regular review of survey feedback, will help TTB to 

exceed its user satisfaction target of 80 percent and continue to attract users to its online 

systems to maintain high electronic filing rates.