California Alcohol Tax Bond
If you're involved with alcohol sales in California, you may need a California alcoholic beverage tax bond to run your business legally. This quick guide explains everything you need to know.
What is a California Alcoholic Beverage Tax Bond?
This type of surety bond ensures that business owners pay their alcohol tax bill to the State of California. If they don't, the state may file a claim against the bond seeking payment equal to the tax bill.
How does an Alcoholic Beverage Tax Bond in California work?
If someone fails to pay their alcohol tax bill leading to a claim against the surety bond, the surety agency that issues the bond will investigate the claim. The surety will then settle all valid claims in full. At that point, the tax bill is paid, but the claim isn't closed yet. When the surety agency settles a claim, the bond holder responsible for that claim must reimburse the surety agency the amount of the tax bill plus interest and fees.
What is the purpose of a California Alcohol Tax Bond?
The purpose of the bond is to guarantee the state of California that it can collect any alcohol taxes owed to it. Surety bond requirements hold businesses accountable for unpaid tax bills, which helps to encourage prompt payment. The bond process also provides an efficient way for California to collect on unpaid tax bills - eg. through the surety rather than the taxpayer.
Who needs a California Alcohol Tax Bond?
Anyone involved with the production, distribution, sale, or storage (warehousing) of alcoholic beverages (of any kind) should prepare to get one of these surety bonds. California requires a business to prove it has the required bond before the state grants a relevant business license. The bond holder will also need to prove they have an active bond in good standing to renew the business license.
Who are the parties involved in an Alcohol Tax Bond in California?
There are three parties:
- Principal - The business owner that obtains the alcohol tax bond and takes financial responsibility for claims.
- Obligee - The state of California. The obligee writes the bond requirements and has the right to file claims for unpaid taxes.
- Surety - The agency that issues the surety bond to the principal and pays claims to the obligee. The principal must pay the surety for any claims settled to the obligee.
How to get a California Alcoholic Beverage Tax Bond?
To apply for a surety bond, you need to complete an application, supply a copy of the bond requirements, submit to a credit check, and give the underwriters any other documents they ask for. This information will help the surety determine your credit risk and calculate your premium price accordingly. Pay the premium to activate the bond, then plan to renew it every 12 months to continue meeting the alcohol tax bond requirement.
How Much Does an Alcohol Tax Bond Cost in California?
The size of the surety bond will not exceed double the bond holders' projected alcohol taxes over whatever payment schedule they follow: monthly, quarterly, semi-annually, or annually. The cost of the bond is a small percentage of the bond size. The exact cost depends on the bond seeker's credit score and financial history. Take advantage of a special program through Viking Bond Service to help people who need a surety bond but have bad credit.
Why you should get your California Alcohol Tax Bond from Viking Bond Service
Businesses across California and throughout the country rely on Viking Bond Service to handle all their surety bond needs. Why? Because we make bonding simple, affordable, and stress-free. When you need a surety bond, count on us to make applying, securing, and renewing the bond as seamless as possible. Service sets us apart.
Apply for a California Alcoholic Beverage Tax Bond Today
Request a quote for a surety bond whenever it's convenient. Or get more information first - you can contact us or call 1-888-278-7389.
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