What is a Liquor Tax Bond?
A Liquor Tax Bond provides security to the obligee (government requiring the bond) that the principal will later pay tax collected upon sale of alcoholic beverages. The obligee may file a claim if the principal is unable to pay the previously collected funds, or if the principal keeps fradulent records of sale volume. Current Market: The surety industry shys away from most financial guarantee type bonds. However, liquor tax bonds are an exception, as most sureties are still willing to write them for those who qualify. Typically, the tax funds generated from the sale are set aside and therefore, there is little risk to surety. These bonds are usually required by state governments, which also helps to ease the risk involved, as most bonding companies are not fond of financial guarantee bonds required by the private sector. Special Programs: Liquor tax bonds are not a high volume surety bond class of business. However, there are specialty high risk programs available for those who do not
