Alcohol & Tobacco Tax & Trade Bureau outlined a broad plan to reverse a decline in alcohol and tobacco tax collections, at least part of which stems from the Craft Beverage Modernization and Tax Reform Act passed last year and from a clunky IT system rolled out in 2000.
TTB is the No. 3 revenue generator in the Federal Government, surpassed only by the Internal Revenue Service and Customs & Border Protection. It collects nearly $21 billion in excise tax revenue each year.
But in the first year of the Craft Beverage Modernization Act, “Federal revenues have declined, with the full impact not yet known,” TTB says.
Part of the problem is a multitude of tax rates. Verifying their appropriate application is complex, especially when it involves imports, says, adding it will work with Customs & Border Protection to address imports.
TTB wants to increase electronic submissions, improve timely filings and support taxpayer guidance. To do this, it proposes to modernize its IT system.
As we reported earlier, the Trump Administration is proposing consolidating Federal alcohol and tobacco tax enforcement in TTB, including transferring jurisdiction for the Contraband Cigarette Control Act to TTB from the Justice Department’s Bureau of Alcohol, Tobacco, Firearms & Explosives.
TTB is asking for $3.3 million in startup funding to begin the transfer and implement the enforcement program. It also plans to cut nine positions from Trade Practice enforcement while adding nine on the tax collection side of the house and four in information technology.