What To Do During the Government Shutdown

The federal government has officially shut down following Congress’s failure to reach a funding agreement. This shutdown has immediate and significant consequences for craft distilleries.

Recently, ACSA urged the Treasury Department to keep label and formula approvals operational during any shutdown. Unfortunately, those services have now been suspended as nearly 400 TTB employees have been furloughed, leaving only a minimal staff in place.

As a result, the Alcohol and Tobacco Tax and Trade Bureau (TTB) has released its official shutdown plan. For craft distillers, this means some core operations will pause—and that could directly impact your business. Here’s what you need to know.

Which TTB Functions Are on Hold during the Shutdown?

The shutdown halts almost all other TTB operations that matter to distillers, including:

• Permit processing (new DSPs, alternations, etc.)
• Certificates of Label Approval (COLAs)
• Formula approvals
• Non-beverage product drawback claims
• Laboratory services
• Most audits, investigations, and administrative functions

In short, if you are waiting on a permit, COLA, or formula approval, those applications will sit untouched until Congress restores funding.  There is then likely to be a backlog.

Which TTB Functions Will Continue During the Shutdown?

A very limited number of TTB employees will remain on the job to protect government property and ensure tax revenue continues flowing. The excepted activities include:

• Processing tax returns with payments (remittances)
• Running computer systems to protect tax and compliance data
• Protecting government property and records
• Handling criminal law enforcement and undercover operations

These functions are narrowly defined and focus on keeping the government’s financial and property interests intact. Most importantly, that does not forgive timely filing of taxes and reports. Craft distillers should continue to adhere to the payment schedule they currently follow. 

What Label Changes Are Allowed During the Shutdown? 

If alterations are planned for the current approved labels, some changes are allowed without a new COLA. A few of these changes include:

• Deleting any non-mandatory label information, including text, illustrations, graphics, etc.
• Repositioning any label information, including text, illustrations, graphics, etc.
• Changing the color(s) (background and text), shape and proportionate size of labels.
• Changing the stated percentages for blends of grape varietals and appellations of origin for wine labels.

For a more complete list of acceptable changes, view pages 3 and 4 on the COLA form (TTB Form 5100.31). For any questions regarding the need for formula approval, use this step-by-step guidance provided by the TTB.

For more details, you can review the official TTB shutdown plan here.

What Should You Do Now? 

In the face of these delays, the best strategy for distillers is to prepare and stay proactive. If you are planning new product releases or facility changes, expect longer lead times and adjust your schedules accordingly. It is especially important to keep your compliance efforts in order—tax filings that include remittances will still be processed, so make sure those are submitted on time to avoid penalties or complications. 

Staying informed is also key. TTB will continue to post updates on its website and through its hotline, which can help you track when operations may resume. 

Finally, lean on ACSA for support, as we will continue advocating for craft distillers and sharing critical updates with the community. Have questions or have a story to share on how this shutdown is negatively impacting your business directly? Reach out to legislation@americancraftspirits.org