Texas-based businesses must have both a mixed beverage sales tax bond and a gross receipts tax bond to be licensed to sell alcoholic drinks to the public. The bond amount for both bonds varies depending on the business size. The bond amount of a beverage sales tax bond is 8.25% of all sales tax collected from selling beverages, and the gross receipts tax bond is 6.7% of all gross receipts from selling mixed beverages. These bonds are usually purchased together since they're required to get a liquor license from the Texas Alcoholic Beverage Commission. The bond is meant to ensure that the state receives the correct amount of taxes from the business, and if they don’t, then the bond can come into effect to pay for the missing taxes.
The cost of a Texas mixed beverage bond, for both the sales tax and gross receipts bond, is usually 1% to 5% of the total bond amount required. The bond amount required will be either the minimum amount required or four times the monthly average tax liability of the business, whichever is greater. Each license permit has a different required bond amount, but it will be, at most, $100,000 for any of them.
Once the required bond amount is determined, the next factor for the bond cost is the percentage of the bonded amount that a business will pay. This is usually between 1% and 5% and is most significantly impacted by the applicant’s credit score. Applicants with a high credit score will pay less for the same bond than those with a low credit score. For example, an applicant with a great credit score who needs a $10,000 bond could pay $100, but someone with a low credit score may pay $500 or even higher if approved.
Each surety company can rate an applicant differently. That’s why we’ve partnered with over 10 surety companies. This allows us to offer our customers the best rates available on the market for their bonds. If you receive a better quote, please let us know, and we’ll do our best to beat it!
At this time, Oklahoma also requires businesses that sell mixed beverages to obtain a mixed beverage gross receipts tax bond and send it to the state Tax Commission before engaging in any sales.
Businesses in Texas that serve mixed alcoholic drinks must obtain two types of bonds: one for sales tax and another for gross receipts. These bonds assure the government that the business will make complete and timely payments of all the taxes it owes.
These bonds can cover the outstanding amounts if a business cannot pay its taxes or fines. The government will initially attempt to assist the business, but the bonds are in place as a backup plan.
Getting a mixed beverage permit can take a few weeks to process completely, so we recommend getting started as soon as you know your business will need one. The steps to take care of this are simple but require attention to detail to process your permit smoothly.
According to the Texas Comptroller of Public Accounts, your permit type is based on whether you want only to sell or sell and serve alcoholic beverages to the public. Below is a list of each permit type and information on what the business can do with this licensing.
Mixed Beverage Permit- The business can sell mixed beverages made up of sealed or unsealed containers, such as wine, beer, ale, and malt liquor, for consumption on the premises. These businesses are required to get $3,750 for both the mixed beverage gross receipts tax bond and the mixed beverage sales tax bond.
Private Club Permit- The Club may sell and serve alcoholic beverages belonging to members of the club to members, their family, and their guests only. These businesses must get $2,250 for the mixed beverage gross receipts tax bond and the mixed beverage sales tax bond.
Private Club Exemption Permit- This allows a club to sell and serve alcoholic beverages to its members and guests. These businesses must get $1,500 for both the mixed beverage gross receipts tax bond and the mixed beverage sales tax bond.
Claims can be filed on Mixed Beverage Sales Tax and Gross Receipts Tax Bonds if a business does not pay the correct taxes for their business by their due date each month. In most cases, the state government will attempt to help the customer determine the correct amount of taxes needed, but if they can still not collect the remaining amount, then a claim can be filed on these bonds.
Once a claim is filed, the surety company will be required to investigate to determine the validity of it. When working with the government, it’s unlikely that their claim will be invalid. If the claim is valid, the surety company will pay the missing tax amount for the claim as long as it’s less than the bonded amount. The surety company will only pay up to the bonded amount for a claim, so if the claim is for a larger amount, the principal will be required to pay that amount.
It’s also important to remember that surety bond claims are different from insurance claims. Insurance is meant to protect the policyholder, but a surety bond is meant to protect the public or, in this case, the government. That is why after a surety bond claim is paid out, the principal will be responsible for repaying the claim amount to the surety company.