Hop Law

Closure of the Tax and Trade Bureau (TTB)

When the federal government shuts down, it has real-world impact.
For those interested in craft beer, wine, and spirits, the government’s shutdown has closed the Tax and Trade Bureau (the agency charged with licensing and regulating alcoholic beverage producers and wholesalers). This has resulted in an inability of producers to obtain formula approval and label approval, making it hard (or impossible) for producers to release new products.

Additionally, TTB personnel are not available to approve applications or answer questions. Therefore, distilleries, wineries, and breweries in the middle of the application process find themselves at a standstill. Unfortunately, costs, including rent, may continue to accrue for producers waiting on their TTB license. Pushing back the expected opening date can have serious consequences for producers.
For example, a brewery that was on pace to open soon may not have the working capital to withstand a long term delay before opening.

While the TTB will begin regular operations once the shutdown is over, there is no end in sight. Moreover, there is likely to be a substantial backlog of questions, applications and forms. The TTB will not be able to catch up and get back into normal work mode right away.
Thus, not only does the shutdown impact those with applications or questions pending, but it is also likely to impact those that file applications or request information after the shutdown is over.

Additionally, the shutdown is not an excuse to not pay taxes. Even though the TTB may be shutdown, taxes and reports required to be filed must still be paid and filed in a timely manner.

While a government shutdown may not impact many people on a day-to-day basis, its impacts will be felt far and wide in the alcoholic beverage industry.