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Changes after Original Qualification – Tobacco Manufacturers, Tobacco Importers and Export Warehouses

Changes with respect to the information shown on the previously submitted application or applicable bond must be filed with the Alcohol and Tobacco Tax and Trade Bureau’s (TTB) National Revenue Center in Cincinnati, Ohio.

CHANGE IN PROPRIETORSHIP

A change in proprietorship occurs when there is a change in the entity which owns and operates the business.  It is synonymous with change in ownership, or it may be due to a change of entity type (for example a change from sole proprietor to LLC; from a partnership to a corporation, etc.).  Either way, the entity which owned the business no longer operates or owns the operations at that location. 

The Internal Revenue Code (IRC) provides that every person, before commencing business as a manufacturer of tobacco products or cigarette papers and tubes, or an export warehouse proprietor, shall file a bond; however, no person shall engage in such business until he receives notice of approval of such bond.

In addition, the IRC and/or corresponding regulations provide that a person shall not engage in the business as a manufacturer or importer of tobacco products, or as an export warehouse proprietor without a permit to engage in such business; however, if a transfer is to be made in the ownership of a tobacco business, the successor shall, before commencing operations, qualify as a manufacturer or importer of tobacco products, a manufacturer of cigarette papers and tubes, or as an export warehouse proprietor.

To ensure continuity of operations, all conditions and/or requirements of Federal laws and regulations must be met; therefore, it is imperative that an application, bond (when applicable), and/or other qualifying documents are filed well in advance of the proposed effective date of the change. 

If a change in proprietorship occurs prior to the filing and approval of the new application, or other required documents, all regulated operations must cease until approval is granted in writing by TTB.  Failure to do so may initiate an adverse action or significant tax consequences.

CHANGE IN CONTROL

A change in actual or legal control occurs when there are changes in stock ownership, LLC membership ownership, or possibly major changes in the corporate officers or directors of a corporation.  In such situations, the legal business entity which operated the business in the past continues to operate the subject business.  In other words, the same legal entity remains in existence which continues to operate the business in question.

Federal regulations require the tobacco manufacturer, tobacco importer, or export warehouse proprietor, to file an application for a new permit within 30 days after the change occurs.  Otherwise, the current permit will automatically terminate at the expiration of such 30-day period.

If an application for a new permit is filed within the required 30-day period, the present permit will remain in effect until TTB takes final action on the new application.

In addition, if a new LLC member or stockholder holds more than 10 percent stock or interest, and is not already on record, a Personnel Questionnaire, TTB Form 5000.9, must be filed.