The Texas Alcoholic Beverage Commission requires many applicants to provide an instrument with their application that guarantees either compliance with certain Code Sections or payment of certain taxes to the State. Applicants may furnish either a Certificate of Deposit, a Letter of Credit issued by a Texas financial institution or a bond issued by an insurance company licensed by the State and approved by the Commission.
Mr. Franklin is a licensed Insurance Agent and, as such, has the ability to offer various types of Bonds to our clients. Of particular interests to our beverage license clients are the following:
Conduct Surety Bonds: This is a bond that is required by and filed with the TABC in the amount of either $5,000 or $10,000. It is generally required of all new "On Premises" applicants for the first three years of their existence. A waiver of the requirement is granted if the applicant applied and is qualified for a Food and Beverage Certificate or if an applicant has a majority interest in another On Premises location where the requirement has already been satisfied.
The $10,000 bond is required if (1) an applicant is charged with an offense under the Code and currently has no bond posted or (2) if the applicants premises is located within 1,000 feet of a public or private school; protected by an "Alcohol Exclusion Zone" ordinance passed by a City or County.
Mixed Beverage Permit Bonds: This bond is required of all new applicants for a Mixed Beverage Permit in Texas. While required under the Texas Alcoholic Beverage Code, it is actually filed with the office of the State Comptroller of Public Accounts. The bond has a minimum statutory limit of $7,500 and protects the state against the non payment of the 14% Gross Receipts Tax that is paid on the alcoholic beverage sales of these permittees. The amount of the bond may be raised to an amount that represents two times the amount of tax paid in within any 30 day period by the permittee. It is required for the first two years of operations of the permittee and will be released after that period as long as taxes and reports have been received on a timely basis.
Permit Bonds: Certain wholesale and manufacturing level Licenses and Permits, notably Beer Importer's Licenses, Local and General Distributor's Licenses, Local and General Class B Wholesaler's Permits, Wholesaler's and Carrier's Permits require bonds ranging from $1,000 to $5,000. These bonds are required on an ongoing basis.
Liquor and Beer Tax Bonds: These bonds are required of all Wholesalers' and are based on importation. The amount of these bonds is set by the Excise Tax Division of the TABC and is required on an ongoing basis.
Sales and Use Tax Bonds: This type of bond is sometimes required by the office of the State Comptroller of Public Accounts due to a business owner late or delinquent filing of sales and use tax. The amount of the bond is set by the Comptroller's Office and often requires collateral or third person guarantees.
Because bonds are financial guarantees, surety companies normally require retail credit reports on all applicants. Collateral, in the form of Certificates of Deposit, is sometimes required.
Notary Public Bonds: Individuals wishing to become a Notary Public in Texas must post a bond with the Secretary of State. The bond is part of the Notary application and can be provided by our office.
Premiums for all of the referenced bonds can be quoted on request.
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