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TTB User Fees Unlikely

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In a June 24, 2009 speech at the 2009 TTB Expo, TTB Administrator John Manfreda confirmed that President Obama’s 2010 budget called for TTB to derive almost all of its funding from user fees. The fees would cover retailers, wholesalers, importers, and producers, and would range up to $1,000 per year (totaling about $84 million per year). Around the same time, a group of industry associations pressed the House Subcommittee on Appropriations to drop the tax. By early July, a Senate subcommittee had rejected the proposal, as reported by the National Association of Convenience Stores.

TTB’s May 22, 2009 Newsletter explained further:

The recently released President’s budget for Fiscal Year (FY) 2010 proposes a significant change for TTB funding. In the past, TTB has been funded by Congress through appropriated resources. The FY 2010 budget proposal transforms TTB from an appropriated Bureau to an entity that will generate fees in order to fund its operations. These fees will shift the burden of paying for the services we provide from the general public to the parties in the alcohol industry.

To accomplish this, legislation will be proposed to allow TTB to establish a permanent program for FY 2010 and the future fiscal years, requiring the payment of annual fees from its industry members. The fees will range from $300 to $1,000, and will vary depending on the type and size of the business entity. In general, these fees will support the Bureau’s core mission 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 will continue to ensure that alcohol products are not contaminated, misbranded or illegally marketed, and will prevent dishonest persons from entering into the alcohol distribution system.

While this approach has been proposed under the President’s budget, the final decision as to the method of funding the Bureau will ultimately rest with Congress. It our belief that non-appropriated funding through an industry targeted fee system will put TTB in a stronger position to move forward with our mission and initiatives in the future.