congress

How would a TTB shutdown affect you?

Will the last to leave the Capitol please turn out the lights?

Not for the first time and probably not for the last, the federal government has narrowly averted a shutdown. Congress agreed on a short-term spending bill that will keep nonessential federal agencies funded though December 3, 2021. Between now and then, a more permanent solution must be reached to keep millions of federal workers in their jobs and the lights on at agencies like the Alcohol and Tobacco Tax and Trade Bureau (TTB).

TTB enforces the provisions of the Federal Alcohol Administration Act (FAA Act) and ensures “only qualified persons engage in the alcohol beverage industry.” They’re the muscle behind laws regulating alcohol production, importation, wholesale businesses, labeling, and advertising, as well as tobacco manufacturing and importing businesses.

What to expect during a TTB shutdown

Since shutdowns happen, it's worth reviewing how they can impact your beverage alcohol business. 

If a shutdown is anything like those in the past, TTB employees won’t be able to answer your questions, process applications, or take care of most other work during the shutdown, whether it lasts one week or one month. The following could also be true:

  • Permits Online may be available but not monitored
  • Formulas Online may be available but not monitored
  • COLAs Online may be available but not monitored
  • Excise tax and operational report filings may be available through pay.gov

Once a shutdown ends, and it must come to an end, agency staff will return to a backlog of formula, label, and permit applications — and more. Or, there will be a backlog on top of the agency’s normal backlog. Prior to the January 2019 shutdown, which lasted a record 35 days, label and formula applications took roughly 15 days for TTB to process and permit applications took about 75 days to process. The bigger the backlog, the longer it will take to work through it.

To help them deal with the aftermath of the 2018–2019 shutdown, TTB asked businesses in the industry to:

  • Withdraw any applications no longer needed
  • Wait to submit new applications
  • Ensure all new application are complete and correct

It’s probably safe to expect something similar the next time a shutdown occurs. In that event, TTB would likely send out an Appropriations Lapse Notice detailing the cessation of their services.

Best practices to emerge from a shutdown unscathed

Although you can’t ignore a shutdown, you should stick as close to your normal compliance processes as possible. We recommend the following:

  • Continue to file operational reports and make Federal Excise Tax (FET) payments as per usual, whether you normally use paper forms or pay.gov

  • Continue to submit new Formulas, COLAs, and Permit applications through the TTB website to get them in the queue

  • If you use Avalara for Beverage Alcohol, continue to follow your normal processes as if nothing has changed; we’ll submit applications as normal during the shutdown

  • If you’re not an Avalara client, set up an appointment so we can show you how we add value for hundreds of beverage alcohol suppliers every day

Should you ever need help getting back on the path to timely compliance after a shutdown, our team of experts can help. Learn more.

This post was updated after Congress reached an agreement.

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