What You Should Know About Alcoholic Beverage Bond

If you are applying for a license to engage in the manufacture, warehousing, or sale of alcoholic beverages, you will have to get an Alcoholic Beverage Bond. In this case, the obligee is the government agency that collects taxes on alcohol and the bond guarantees the payment of state or local taxes. The regulations concerning taxes and the handling of alcohol differ from one state to another.

The name of the bond differs from one state to another
The Alcoholic Beverage Bond is known by many names — Beverage Tax Bond, Alcohol Ordinance Tax Bonds, Brewer’s Bond, and the Distilled Spirits License Bond, to name a few. More than one bond may be necessary for a local area. As an example, the city of Decatur, Alabama alone has Alabama Alcohol License Tax Bond and the Alabama Alcohol Ordinance Tax or Fee Bond. You’ll need to research the bonds that are applicable in your case.

The obligee will differ from one state to another
The obligee is a state body, but the specific government department that acts as the obligee is different in each state. In addition, the same state can have different obligees for a different type of Alcohol bond. You’ll need to find out the specific obligee for your bond.

The Alcoholic Beverage Bond does not cost the full bond amount
The cost of the bond is a fraction of the face value of the bond.

You can buy a bond with bad credit
Although credit history is a major factor when pricing an Alcoholic Beverage Bond, you can buy a bond even if you have bad credit. In such cases, the surety underwriter will look at past financial stability and past business performance records, and you will have to pay more for the bond.