Who Needs a Texas Liquor License?
Texas issues licenses related to the manufacture, sale, and distribution of alcoholic beverages in two broad categories: liquor permits and beer licenses. There are a number of different specific permit or license types within each category, depending on the nature of the business. It is illegal to engage in any of these businesses without first obtaining the required license or permit.
The Texas Alcoholic Beverage Commission (TABC) offers a downloadable guide that describes in detail what activities are allowed under each type of license and permit.
What Are the Licensing Requirements?
The licensing process is handled by the Licensing Division of TABC. All of the necessary forms and instructions for completing them are available online as fillable PDF files. There is a different set of forms for each license or permit type.
In most cases, an applicant will need to complete a prequalification packet, a location packet, and a business packet. In some cases, a bond packet is also required.
Why is a Surety Bond Required?
There are three different types of surety bonds that may be required in order to obtain or renew a Texas liquor license. Two of them are required at the state level, and one applies only in certain counties.
Any retailer without a Food and Beverage certificate must obtain a Conduct Surety Bond for either $5,000 (if located more than 1,000 feet from a public school) or $10,000 (if located closer to a public school).
A Fee Interest Bond is required from anyone applying for a Brewer’s Permit (resident or nonresident) or Manufacturer’s License (resident or nonresident). The bond serves as a guarantee that the applicant does have an ownership interest in a brewery.
In four Texas Counties (Bexar, Dallas, Harris, and Tarrant), a $2,000 PerformanceBond is required as a condition for holding a Beer Retailer’s On-Premise License or Wine and Beer Retailer’s Permit without also holding a Food and Beverage Certificate.
Understanding How the Texas Liquor License Process Works
Each of these surety bonds is a legally binding contract among these three parties:
-������ The �obligee� requiring the bond (TABC or a county government)
-������ The �principal� purchasing the bond (the license holder or permittee)
-������ The �surety� underwriting and issuing the bond (the surety bond company)
The terms of each surety bond identify what the principal must do to avoid a violation that will result in a claim against the bond. If a violation does occur, the surety typically will attempt to negotiate a settlement, but if that fails, will go ahead and pay the claim.
In making such a payment, the surety is extending credit to the principal, because paying claims is the principal�s legal obligation, not the surety�s. The advance payment simply gives the principal some time to gather the necessary funds. The principal must subsequently reimburse the surety in full.
What Does It Cost?
Two variables used to calculate the premium for any surety bond: the required bond amount established by the obligee and the premium rate the surety assigns to the principal. That premium rate is based primarily on the principal�s personal credit score. With a great credit score, the annual premium for a surety bond can be as low as 1% to 3% of the required bond amount. Those with poor credit could pay a premium rate as high as 10% to 15%.
Get Bonded Today
Our experienced professionals will help you obtain any surety bond you need in order to get a new or renewal Texas liquor license.