Tidbits from TTB’s Annual Report

I’m not sure if I’ve actually read the Alcohol and Tobacco Tax and Trade Bureau’s (TTB) Annual Report cover to cover before. It’s actually quite good and informative. Here’s a few things I learned from reading the 2016 report.

  • Screen Shot 2017-03-15 at 9.23.37 AMTTB’s vision is to “be the world’s authority in the regulation, taxation, and science of alcohol and tobacco products and a model for next generation government”
  • TTB has three strategic goals: Collect the Revenue, Protect the Public, and Management and Organizational Excellence
  • There are 82,391 total permittees, 97% of which are from the alcohol industry, however only a subset (12,941 in FY 2016) pay taxes in a given fiscal year.
  • $22.1 Billion in revenue was collected in FY 2016, on a total budget of only $106 Million
  • 161,477 Certificate of Label Approval Applications (COLAs) were received in FY 2016. That is a massive number!
  • Tobacco tax collections are trending downward (12% since 2012), but still amounted to $13.3 billion in FY 2016, representing 60% of all TTB tax collections
  • Tax collections in Virginia and North Carolina exceed $5 Billion each. California and Kentucky are north of $1 Billion each. In Mississippi, North Dakota, and Wyoming, tax collections are each less than $1 Million.
  • In FY 2016, TTB processed approximately 8,000 applications for a federal permit
  • California boasts 7,254 alcohol permit holders, far exceeding the next state of Washington (1,911)
  • Wine products represented roughly 72% of all COLA applications in FY 2016, followed by malt beverage (18%) and distilled spirits (9%)
  • Distilled spirits represented 48% of the 11,452 formula applications, followed by wine (32%) and malt beverages (20%)

 

California ABC issues $400,000 settlement against beer wholesalers

The California ABC issued a press release stating that they had issued on of the biggest penalties in the history of the ABC. Primarily levied against Anheuser-Busch, LLC’s distributorships, the settlement is for prohibited marketing practices. The distributors are accused of providing “things of value” to retailers, thus creating an unfair marketplace. The year-long investigation in this case begun back in 2015.

Our Take: Some of the infractions seem minor here, but many ABCs around the country take “Tied House” laws very seriously and won’t stand for any things of value to be provided. It’s a bit surprising to see the California ABC issue such a major settlement, akin to what has become standard fines from the New York SLA. California is clearly sending a message to the rest of the industry here.