Texas Alcoholic Beverage Bonds

Request Quote

What Are Texas Alcoholic Beverage Bonds?

There are several different types of surety bonds that you may be required to purchase when applying for a mixed beverage permit in Texas (there are other bonds that apply only to manufacturers, wholesalers, distributors, and others in the alcoholic beverage industry). The main Alcoholic Beverage bonds that retail permittees typically need to purchase include the following:

• Texas Mixed Beverage Gross Receipts Tax bond.�This guarantees the monthly remittance of the 6.7% tax on gross receipts.
• Texas Mixed Beverage Sales Tax Bond. This guarantees the monthly remittance of the 8.25% sales tax on mixed beverage sales.
• Texas Alcoholic Beverage Commission (TABC) Conduct bonds.�These are required from permittees who do not have a Food and Beverage Certificate. The required bond amount depends on whether the permittee’s establishment is within 1,000 feet of a public school ($10,000) or farther away ($5,000).
• TABC Performance bonds. These are required only in certain Texas counties. They also only apply to beer retailers with an on-premise license and retailers with a wine and beer permit but no Food and Beverage Certificate. These bonds must be in the amount of $2,000, unless a violation has resulted in a permit or license revocation. A $4,000 bond is required for reinstatement, or $6,000 for reinstatement after a second revocation.

Both conduct bonds and performance bonds are intended to ensure a permittee�s compliance with the Texas Alcoholic Beverage Code and other applicable regulatory requirements.

Who Needs Them?

Which specific Texas Alcoholic Beverage bonds you need depend on the following factors:

• What alcoholic beverage permit or license you hold
• Where your business is located
• Whether or not you hold a Food and Beverage Certificate

You�ll be informed as to which bonds you need when you begin the process of obtaining your TABC license or permit.

How Do They Work?

Every surety bond agreement is a legally binding contract between the party requiring the bond (the obligee), the person purchasing the bond (the principal), and the company underwriting and issuing the bond (the surety).

The terms of the agreement make clear what you must do to avoid violating the agreement and incurring claims. If you do violate the agreement, the obligee can place a claim against your bond to recover any financial loss stemming from that violation.

The bond also specifically indemnifies the surety against any legal obligation regarding the payment of claims, making that solely your responsibility as the principal. Usually, however, the surety will go ahead and pay a claim on your behalf, activating a short-term line of credit that you must pay back. This ensures that claims are paid promptly and gives you the ability to repay the claim amount in manageable installments over a certain period of time.

What Do They Cost?

The cost to obtain a Texas Alcoholic Beverage surety bond is a small percentage of the bond amount. That required bond amount is established by the obligee and is not the same for every type of bond or every principal. For example, the required amount of a TABC conduct bond is $10,000 for an establishment within 1,000 feet of a public school.

Get Bonded Today

Request a convenient online quote today, or call to speak with one of our surety bond professionals about the Texas Alcoholic Beverage bonds you need.

Request Quote