TABC Bonds

What are TABC Bonds: Requirements, Types, and Compliance

Businesses in Texas that sell alcoholic beverages are often required to secure TABC bonds before obtaining a license or permit from the Texas Alcoholic Beverage Commission (TABC) and the Texas Comptroller of Public Accounts. These bonds serve as financial guarantees that businesses will comply with state alcohol laws, ensuring regulatory adherence and consumer protection.

Types of TABC Bonds

The type and amount of bonds required depend on your business location, license type, and proximity to public schools. Below are the primary bonds that may apply to your business:

1. Conduct Surety Bond

A Conduct Surety Bond is required for retailers who do not hold a Food and Beverage Certificate (FB). The bond amount varies based on the business’s distance from a public school:

  • $5,000 bond – Required for businesses located more than 1,000 feet from a public school.
  • $10,000 bond – Required for businesses less than 1,000 feet from a public school.

This bond can be submitted in the form of a surety bond, letter of credit, or assignment of a certificate of deposit (CD).

2. Performance Bond

A Performance Bond is only required if your business meets all of the following conditions:

  • You are located in Bexar, Harris, Dallas, or Tarrant counties.
  • You are applying for or hold a Beer Retailer’s On-Premise License (BE) or a Wine and Beer Retailer’s Permit (BG).
  • You do not have a Food and Beverage Certificate (FB).

If all the above conditions apply, you must obtain a $2,000 Performance Bond. This bond amount may increase if your business violates the Texas Alcoholic Beverage Code or TABC Rules. The Performance Bond can be submitted as a bond, letter of credit, or certificate of deposit (CD).

3. Fee Interest Bond

A Fee Interest Bond is required in specific brewing arrangements. You will need a $30,000 Fee Interest Bond if:

  • You participate in an alternating brewery proprietorship or contract brewing agreement.
  • You hold a Brewer’s License (BW) or a Nonresident Brewer’s License (BN).
  • You do not own a fee interest in any brewing facility.

Similar to other TABC bonds, the Fee Interest Bond can be provided as a surety bond, letter of credit, or certificate of deposit (CD).

Security Bonds for Texas Mixed Beverage Taxpayers

In addition to the Conduct Surety Bonds required by TABC, businesses with mixed beverage or private club permits must post two separate security bonds to ensure tax compliance:

  1. A bond covering the 6.7% Mixed Beverage Gross Receipts Tax
  2. A bond covering the 8.25% Mixed Beverage Sales Tax

These bonds act as financial security, ensuring timely tax payments to the Texas Comptroller of Public Accounts.

How to Obtain Bonds.

Securing the right TABC bond is essential for businesses operating in the alcoholic beverage industry. Working with a licensed bonding company can streamline the application process and help ensure compliance with TABC regulations.

Clear Beverage Licensing specializes in assisting businesses with securing the appropriate TABC bonds. Whether you need a Conduct Surety Bond, Performance Bond, Fee Interest Bond, or Mixed Beverage Taxpayer Bonds, we can guide you through the bonding process and help you stay compliant with Texas alcohol laws.

Contact Clear Beverage Licensing today for a free consultation.

TABC Bonds FAQ

Federal TABC bonds are financial guarantees required by the Texas Alcoholic Beverage Commission (TABC) and the Alcohol and Tobacco Tax and Trade Bureau (TTB) to ensure that alcohol-related businesses comply with federal and state regulations. These bonds help protect the government from financial losses due to unpaid taxes, fines, or non-compliance with alcohol laws.

Any business involved in the manufacturing, distribution, or retail sale of alcoholic beverages may need a federal TABC bond.

This includes:

  • Breweries, wineries, and distilleries
  • Importers and wholesalers
  • Retailers who sell alcohol on-premises or off-premises
  • Businesses participating in contract brewing or alternating proprietorships

The cost of a federal TABC bond depends on the bond type and required coverage amount. Common bond amounts include:

  • $5,000 – $10,000 for Conduct Surety Bonds (depending on proximity to schools)
  • $2,000 for Performance Bonds (for businesses in select Texas counties)
  • $30,000 for Fee Interest Bonds (for contract brewing or alternating proprietorships)
  • Varied amounts for mixed beverage tax security bonds based on sales volume

Premium rates vary based on business history, financial strength, and risk assessment.

To apply for a federal TABC bond, you must:

  1. Determine the required bond type and amount based on your TABC license or permit.
  2. Contact a licensed surety bond provider to obtain a bond quote.
  3. Submit financial documents and business details for approval.
  4. Pay the bond premium and receive your bond certificate.
  5. File the bond with the Texas Alcoholic Beverage Commission (TABC) and TTB, if applicable.

Failure to maintain a federal TABC bond can result in:

  • Suspension or revocation of your TABC license or permit
  • Fines and penalties for non-compliance
  • Legal action or loss of business authorization
    To avoid disruptions, businesses should renew their TABC bonds before expiration and ensure compliance with state and federal alcohol regulations.