We reached a huge milestone the other night, we filed the TTB paperwork! For all of you not sure what “TTB” is, it stands for Tax and Trade Bureau. All breweries and brewpubs are required to file paperwork with the TTB to obtain a Brewers Permit. We have heard that it’s a lot of work, and while I am not claiming it to be easy, it’s not hard – just time consuming! As the President, Ryan claims I am responsible for doing all the paperwork. Since when do Presidents do all the “dirty work”? I guess that’s how it goes when we have no employees!
Obtaining significant amounts of information, from a variety of sources proved to be more time consuming than anticipated, and seemed to make the application process drag out longer than it should have been. I want to share with you some details that may help you avoid some complications through your application process. At the end of the post, I have included some useful links to the TTB related topics discussed.
One of the biggest questions, most startups face is when do I start the process? We had looked into the TTB months ago, and figured out, we can’t do much until we have equipment on order and a facility leased. Once we had that done, we started the online brewers permit application.
The electronic system allows you to save your progress along the way, and while that’s a nice feature, you can’t skip around the application, which I discovered once I reached the page on OOI tracking numbers. I am thinking, “what’s that?” So, after some research, I realized I needed to get some very detailed information from our investors. As stated by the TTB: “For each person who is a sole proprietor, partner, officer, director, member, managing member, or owner of 10% of applicant entity, you must file a Officer/Owner Information Application”.
In our situation, we were required to file 5 OOI’s! Each person is able to create their own login ID and password and fill out all the information. It sounds easy, and actually took me about 20-30 minutes to gather my OOI information, but I am a very proactive person, and this TTB permit is what sits between me and being able to sell my brew. Involving three other people (out of state) to do this was kind of hard. I think they were a little fed up with my repeated emails or calls “did you get your OOI submitted yet?” But hey, that’s my job. I would give yourself a week (or slightly more) to get all this in (unless it’s just you, then it’s easy). Once the OOI’s are submitted, each person gets a tracking number, which you will need to provide within the main brewers permit application, along with more details regarding their “stake” in the business.
Within the OOI application it asks several personal/background type questions. They request 4 business/character references (including phone and address), a bank reference (TTB told us to call our bank and ask for a bank reference), and place of residence history. Getting our investors to figure out where to go, what to fill out, and actually getting them to do it is the hardest part. In addition to the OOIs, investors will be required to state source of funds and provide appropriate documentation1.
Speaking of attachments, there are SEVERAL of them, and they vary depending on your company’s setup (i.e. corporation, LLC, etc)2. Ryan and I reviewed these attachments a few times during our application process, and at quick glance we felt we had everything, or could easily obtain it on very short notice. WRONG! Both the Brewers Bond3 and the Certificate and Articles of Corporation (articles of incorporation stamped by the Secretary of State) took longer than anticipated.
I just checked my email, the first correspondence regarding the Brewers Bond was February 28th, we finally got it on March 20th! I got so fed up, I called up the surety company, and said “you are holding up our TTB filing, if we don’t get the brewers bond tomorrow, we are going somewhere else”. Guess what, we got it! The point is, get the Brewers Bond setup early. While I have read that other brewers got their bond setup in one business day, I would start early to be safe.
If you have done any sort of research on TTB, a lot of times this whole Brewers Bond topic comes up, and breweries reference getting their $1,000 bond. So, my question was, it is always $1,000 bond? I discovered that fairly recently, the TTB issued a “temporary three year rule”, which essentially says if you are a small brewery with an estimated excise tax liability no more than $50,000, your bond amount will be set at $1,000. Do some quick math, ($7/bbl)(X bbls) = $50,000….you would have to produce approximately 7,143 bbls. Yeah, that’s not gonna happen in year one on our 10bbl system.
We will be posting future blogs regarding any changes recommended by the TTB and share them with you (if we have any). One last thing, I have to say my experience with the TTB through this whole application process has been great. If you have a question, call them, they are great and will answer your questions!
1Source of funds documentation: http://www.ttb.gov/applications/pdf/information_required_source_of_funds.pdf
2Attachments required by the TTB:
3Bond form with instructions: