Mixed Beverage Sales Tax Bonds in Texas: Renewal Deadline is Near

Published: Nov 2, 2016
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You may remember that in 2014 the State of Texas altered HB 3572, which lowered the gross receipt tax imposed on the sale of mixed beverages to 6.7 percent. However, it also introduced a sales tax on mixed beverages to the amount of 8.25 percent. The sales tax also applies to non-alcoholic beverages prepared to be mixed into cocktails and ice that is about to be mixed with alcohol as well.

With this also came a new surety bond requirement, so as of January 1st 2014, sellers of mixed beverages need to pay not one but two types of surety bonds:

  • Mixed Beverage Gross Receipts Tax Bond
  • Mixed Beverage Sales Tax Bond

Each of them is valid for a year and each of them need to be renewed before the end of this year, so let’s take a look on how to do it in order to stay compliant in 2017.

Who needs to renew their bonds?

The two types of bonds are required by the holders of several different permits: mixed beverage, private club, caterer, distiller and rectifier, etc. You can check a full list of permittees required to post the bonds on the website of the Texas Comptroller of Public Accounts. If you were required to post them last year, this means you have to renew them now.

So what is the purpose of the bonds? They are both a form of sales tax bonds, meaning that they act as a protection to the state in case you do not pay sales taxes and declare revenue on time.

How do I renew my mixed beverage sales tax bonds?

If you already held a mixed beverage sales tax bonds last year, the agency you worked with should be contacting you with a renewal offer. Timing is important and you shouldn’t procrastinate, but you still have time to compare offers from different agencies.

Lance Surety Bonds has the best rates for sales tax bonds – you can quickly get an estimated by applying for a FREE online bond quote.

The bonding agency will give you the relevant bond form, after which you sign it and hand it back. The agency files it for you and your bond is considered renewed.

How much would the bond renewal cost me?

Pricing for these types of bonds is a bit different form most other surety bonds. The total bond amount you are required to pay will depend on the type of permit you have and the amount you make in sales. For both types of mixed beverages sales tax bonds, the total amount can vary between $3,750 and $100,000 for holders of a mixed beverage permit and between $2,250 and $100,000 for holders of a private club permit.

Then there are the premiums paid to obtain each one of them – they can vary between 1% and 17% of the bond amount you are required to post. Premiums are calculated mostly based on your personal credit score.

Is there a way to lower my bonding costs?

Yes, there are, even if your credit score is less than perfect. Surety bond costs also depend on certain other factors that the bond underwriters considers as lowering the risk of the applicant trigger a claim and failing to repay it.

One such factor is your financial strength and that of your business partners. Another is the amount of experience you have in the industry. You should always talk to your surety agent about possible ways of reducing costs further.

Save money: work with Lance Surety Bonds

If you want to be sure that you are really getting the lowest possible rates for your bond renewal, you should choose Lance Surety Bonds.

Why? The reasons are countless. Our team of experienced agents has the know-how to help every applicant reduce their costs by using an approach best suited to their needs. We don’t believe in one-size-fits-all solutions. Furthermore, we have established strong partnerships with several very well-reputed sureties and for your application we will always choose the one that offers the best rates.

What are you waiting for? Get your FREE online bond quote and we’ll get in touch with you to make your surety bond renewal as easy as possible. If you have more questions about your surety bond, call us at 877.514.5146 and we will be happy to help you.

 

 

 

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Victor Lance is the founder and president of Lance Surety Bond Associates, Inc. He began his career as an officer in the U.S. Marine Corps, serving two combat tours. As president of Lance Surety, he now focuses on educating and assisting small businesses throughout the country with various license and bond requirements. Victor graduated from Villanova University with a degree in Business Administration and holds a Masters in Business Administration (MBA) from the University of Michigan's Ross School of Business.