Everything You Need to Know About Alcohol Bonds / Liquor Bonds

Everything You Need to Know About Alcohol BondsIn most states, if you’re involved in the sale or distribution of alcohol you’ll need to know about alcohol bonds.

Let’s take a look at the basics:

Alcohol bonds are used to ensure that you follow your states rules and regulations

Alcohol bonds are a type of compliance bond, they can also be known as liquor license bonds, and alcohol tax bonds. There are various types of bonds that vary by state. These bonds can cover transportation, manufacturing, storage, and sale of alcohol within the state. Alcohol bonds are used to ensure that companies who manufacture, sell or distribute alcohol comply with a state’s rules and regulations.

Liquor bonds involve three key parties: the principle, the obligee, and the surety.

The principle is the business or individual who is purchasing the liquor bond as a guarantee that they will follow the state’s regulations and pay liquor taxes.


The obligee is the party who requires the purchase of the bond; in the case of liquor bonds, this is usually a government agency.


The surety is the underwriter and issuer of the liquor bond.


When you purchase a liquor bond the surety agrees to pay any liquor taxes or penalty fees you owe to the state, should you fail to do so. This means that the state is guaranteed to receive income from your alcohol sales, even if you fail to pay. If the state claims from the surety to cover your debts, the surety will then pursue the amount of those payments from the bond principle (you).

The cost of purchasing a liquor bond

The amount will likely be similar to the penalty costs for licensees. This means your bond will cover the penalty amount should you fail to comply with the rules and regulations of your state.


The amount a liquor bond is written for depends on the state and the type of bond being purchased. The cost of the bond is generally calculated as a percentage of the total bond amount. Your credit score can impact the cost of a bond, with prices ranging from 1% to 15% percent of the bond amount. You will likely need to renew your liquor bond once per year, but liquor bond duration varies by state.


For help finding a liquor bond in your state, contact Viking today. We’ll get you a quote within 24 hours and help make the application process quick and easy!