Potential Government Shutdown Will Affect Beverage Alcohol Industry

Unless Congress is able to pass an appropriations bill in the next few days, the U.S. government is set to shut down all nonessential services effective October 1, 2023. This will include (among many other agencies) the Alcohol and Tobacco Tax and Trade Bureau (TTB), which will impact the beverage alcohol industry.

If the shutdown occurs, the TTB will have to suspend most of its activities including:

1. Formula review and approval.
2. COLA review and approval. COLAs with pending corrections that are due during the shutdown that have not been approved will be formally rejected, requiring a new application.
3. Application review and approval for TTB-issued permits. Other permit-related requests, such as updates to permittee information, will also be unavailable.
4. CBMA refunds claims for the quarter beginning on October 1 may still be filed during the shutdown, but the TTB will be unable to process the claims or issue refunds.

Alcohol excise taxes may (and should) still be filed during a shutdown as per usual, either by paper or through pay.gov.

Formula, COLA and permit applications may also continue to be submitted to the TTB during a shutdown, however the TTB will be unable to review or approve anything submitted until after an appropriations bill has been passed. Once the shutdown has passed, the TTB will begin working through the backlog of applications it has received, which could take several weeks or more depending on how long the shutdown lasts.

If it happens, this will be the fourth government shutdown in the last 10 years, each of which has at least temporarily affected the TTB’s functions. It is impossible to predict how long a shutdown may last, however it is hoped that the House of Representatives will be able to come together and resolve on a funding plan quickly.