Who Needs an Arizona Liquor License?
Anyone planning to operate an alcohol-related business in Arizona needs to obtain an Arizona liquor license. Though most people think of liquor licenses as being something that�s only needed for selling alcoholic beverages for on-site or off-site consumption, manufacturers and distributors also must be licensed by the state.
What Does the Licensing Process Involve?
If you want to get a liquor license in Arizona, you can purchase one directly from Alcohol and Beverage Control (ABC) or buy an existing license from its current owner.
Arizona maintains a quota system for liquor licenses. The number of licenses to sell alcohol (for on-premises or off-premises consumption) available in a particular area is determined by the area�s population. Additional licenses only become available when the population increases by a certain amount.
Although the specifics vary by license type, this is the general outline of the licensing process:
1.������ Determine which type of license is needed and whether you can get it from the state or from someone selling an existing license.
2.������ Obtain all required documentation. If purchasing an existing license, a signed agreement between the seller and buyer is required.
3.������ Purchase a Federal Alcohol Tax (TTB) surety bond if it’s required.
4.������ Complete the appropriate application, pay the license fee, and submit with all required documentation to the Department of Liquor License Control (DLLC).
5.������ Undergo fingerprinting and investigation by the DLLC.
If all goes well, in two or three months, you�ll receive your license in the mail.
Why is a Surety Bond Required?
Sellers, manufacturers, and distributors of alcohol in Arizona may need to purchase a federal TTB bond. This is a surety bond required by the U.S. Department of the Treasury, specifically by the Alcohol and Tobacco Tax and Trade Bureau (the �obligee� in the surety bond agreement). The required bond amount (the �penal sum�) differs by license type and other factors.
A TTB bond is the licensee�s guarantee to comply with certain statutes and pay all taxes imposed by the federal government on manufacturers, distributors, and sellers of alcoholic beverages. The terms and conditions of a TTB bond are very specific as to the penalties for violations.
How Does It Work?
Violating the terms and conditions of a TTB bond can result in the federal government seeking restitution from the principal. The surety bond company (known simply as the �surety�) will attempt to negotiate a settlement, but if that fails, they will usually go ahead and pay the claim.
That payment is, in effect, a short-term loan made by the surety to the principal to give the principal a little time to gather the necessary funds.� It is not a gift. The surety has no legal responsibility to pay claims. The principal, however, is legally obligated for claims payment and must therefore repay the surety.
Understanding the Process of Obtaining a Liquor License in Arizona
The annual premium for a TTB bond is determined by multiplying the required bond amount by the premium rate that the surety bond company assigns to the principal. The key factor in setting the premium rate is the principal�s personal credit score. With a great credit score, the premium rate could be as low as 1%, but for those with poor credit, it could be as high as 15%.
Get Bonded Today
Reach out to us today to discuss the bond you may need in order to obtain or renew your liquor license.