On March 22, 2013, the Alcohol Tobacco Tax and Trade Bureau ("TTB") announced the release of the TTB 2012 Annual Report. TTB is the third largest tax collection agency in the U.S.Government, behind the Internal Revenue Service (IRS) and U.S. Customs and Border Protection (CBP). In 2012, TTB collected $23.4 billion in alcohol, tobacco, firearms and ammunition excise taxes—a decrease of less than a half of 1 percent compared to 2011. Prior to 2008, TTB and its predecessor—the Bureau of Alcohol, Tobacco and Firearms (ATF)—collected between $14 - $15 billion in excise taxes annually. Now, for the fourth consecutive year, TTB tax collections have exceeded $23 billion.
Collection of Excise Taxes
As an agent of the Federal Government and as authorized by 26 U.S.C., TTB collects excise taxes from alcohol, tobacco, firearms, and ammunition industries. TTB collected approximately $78 million less in excise taxes compared to the previous fiscal year. In 2011, TTB collected $23,457,049,000 in excise taxes. In 2012 a decrease to $23,378,944,000.
Fines, Penalties and Interest
TTB collected approximately $3.4 million less in fines, penalties and interest in 2012. In 2012, TTB collected $937,000 in fines, penalties and interest. However, in 2011, TTB collected an astounding $4,361,000 in fines, penalties and interest.
Prospectus for TTB
In forecasting tobacco revenues, Federal collections are expected to decline after peaking at $15.9 billion in 2010. Higher prices on tobacco products have historically resulted in decreased consumption and increased illicit trade, which combined would indicate declining tax revenues in the out years.
TTB efforts in enforcing both its civil and criminal tax jurisdiction support voluntary tax compliance and act to deter illicit trade, and TTB will continue to act to address the revenue threat posed by the diversion of alcohol and tobacco products to ensure the collection of the taxes due.