Obtaining a Mixed Beverage Tax Surety Bond in Texas

Here’s what you need to know about the cost, purpose, process, and other considerations in obtaining a mixed beverage sales tax surety bond, also known as an alcohol tax in Texas.

What Is a Mixed Beverage Sales Tax Surety Bond, and Why Do I Need One To Operate a Mixed Beverage Drinking Establishment in Texas?

All companies or individuals must first be licensed and obtain a mixed beverage tax surety bond before they can operate a private or public drinking establishment in Texas. This bond must be posted as security to ensure that funds are available to pay the 8.25% tax on alcohol sales in the state as mandated by Chapters 151 and 183 of the Texas Tax Code.

A surety bond is a guarantee that the sales tax payment obligations will be met. If not, that payment will be demanded of the surety company by the state.

Like all surety bonds, this mixed beverage tax consists of three parties. You or your company is the purchaser of the bond, also known as the principal, permit holder, or permittee. The State of Texas (specifically the Texas Comptroller of Public Accounts) is the obligee or the entity that requires the surety bond. The third party, the surety company, sells the bond to the principal and is responsible for payment to the State of Texas if the principal fails to remit the monthly alcohol sales tax payments in a timely manner.

This 8.25% sales tax on each alcoholic drink consumed at the commercial or private establishment must be filed on the 20th of each month. If the principal, or permittee, fails to file this tax remittance on time each month, the State of Texas will go after the surety for payment up to the face value of the bond.

Is This the Same as the Mixed Beverages Gross Receipts Surety Bond That a Texas Drinking Establishment Must Also Obtain?

No. These are two separate kinds of surety bonds such drinking establishments must purchase. The Mixed Beverages Gross Receipts bond guarantees the remittance of the 6.7% tax on gross receipts for alcohol sales at the establishment.

The Mixed Beverage Sales Tax Surety Bond is a Texas Comptroller-required bond guaranteeing the remittance of all mixed beverage sales taxes on a monthly basis.

Is This Surety Bond an Insurance Policy?

No. A surety bond is entirely different than an insurance policy. While an insurance policy can result in the insurer paying a claim on behalf of a policyholder individual or company, the surety company will expect reimbursement of the funds remitted to the state if the principal neglects this payment for any reason.

In this regard, the principal is the ultimate payor of the alcohol sales taxes owed, but the State of Texas deals directly with the surety for the sake of expediency.

TMD Surety might extend repayment terms to you, as the principal, on the tax money owed if we agree to offer you or your company the alcohol tax bond and you fail to pay this sales tax to the state in a timely manner.

What Is the Face Value of the Mixed Beverage Sales Tax Surety Bond?

The face value, or Texas alcohol tax bond amount, varies based on the volume of alcohol business transacted at each principal’s drinking establishment. The bond amount must be set at either four times the permittee’s average sales tax liability, or $100,000, whichever is higher.

We’ll tabulate the bond amount based on the information you provide.

What Does This Texas Mixed Beverage Sales Tax Cost the Principal?

The cost for the bond will vary, but it’s a small fraction of the bond amount or face value. The cost to you, as the principal, starts at about $250. The main determining price factor, in addition to the bond amount or face value, is the credit report of the principal. Those with the highest credit scores will pay the least for a Mixed Beverage Sales Tax Bond.

This is because bond applicants with higher credit scores are considered to be at higher risk of defaulting on terms of the surety bond by missing alcohol sales tax remittance dates and obligations.

It’s still possible to get a surety bond even with a low or poor credit score, but the cost escalates. At TMD Surety, we can quickly estimate the price you’ll pay for a Mixed Beverage Sales Tax Surety Bond almost as soon as you submit an online application.

Full payment for the bond must be submitted to TMD Surety before the bond will be issued. Furthermore, you must buy a surety bond for every separate drinking establishment location you operate in the State of Texas and renew the payment annually in order to keep the bond current and in force.

Whatever the cost, you must pay the full premium amount before the surety company issues the bond.

How Do I Obtain a Mixed Beverage Sales Tax Surety Bond in Texas?

We’ve made it quick and easy to apply for this bond online. Simply fill out our online form, and let us take it from there. We’ll quickly review your application and get you an alcohol tax surety bond rate in as little as (estimated time).

Once you have paid for your surety bond, it will be emailed to you, and you can print it out. Let’s get started.

Apply here.