What is a brewer’s bond?
A brewer’s bond is a type of federal alcohol tax bond that guarantees your brewery pays all required taxes while operating. Any brewery wishing to run a pilot brewing plant or produce beer on the premises of a brewery must post this bond.
The Department of Treasury Alcohol and Tobacco Tax and Trade Bureau (TTB) requires this bond, which is why it sometimes goes by the name TTB bond or TTB brewer’s bond. This federal bonding requirement is separate from your local and state surety bond requirements.
Get Your Federal Brewer’s Bond:
- Any brewery wishing to operate a pilot brewing plant or produce beer on a brewery’s premises must post this bond.
- This federal bonding requirement is separate from local and state surety bond requirements.
- You could face costly bond claims if you break your bond agreement by failing to pay enough taxes.
- The cost of your surety bond will depend on the bond amount required, which varies by business size and whether you file quarterly or semi-monthly excise tax returns.
- The minimum bond amount is $1,000, and the maximum is $500,000.
How do brewer’s bonds work?
Like other license bonds, a brewer’s bond is a three-party agreement between a principal, an obligee, and a surety.
- Principal: The bonded party (brewery) that must abide by the bond contract and operate legally
- Obligee: The governing authority that requires the surety bond
- Surety: The underwriter that issues the bond and pays out claims if necessary
If you break your bond agreement by failing to pay enough taxes, you could face bond claims. Initially, your surety can cover the costs to settle the claim, but you will be held responsible for reimbursing your surety in full. Claims can have costly consequences, damaging your reputation and ability to get licensed and bonded again.
You can learn more about the purpose and conditions of this bond by reviewing the official Brewer’s Bond form.
How much does a brewer’s bond cost?
The cost of your surety bond will depend on the amount required, which varies by business size and whether you file quarterly or semi-monthly excise tax returns. The minimum bond amount is $1,000, and the maximum is $500,000. See the official bond form posted by the TTB to learn your specific requirements. Here’s an overview:
- Quarterly filers will need a bond equal to 29% of the maximum tax they’re liable to pay during the calendar year.\
- Semi-monthly filers must post a bond equal to 10% of the maximum amount of tax they’re responsible for paying throughout the calendar year.
You will pay a small percentage of the bond amount to obtain your bond from a surety provider. You could pay as little as 1% if you have excellent credit. For example, if you need a $1,000 bond, you might pay as little as $100 per year.
Frequently Asked Questions
Even if you have a lower credit score, you may still be able to get bonded. You’ll likely pay a higher premium – closer to 5-10% or more of the bond amount. If you have questions about the bonding process or your ability to get a brewer’s bond, call ZipBonds at (888) 435-4191.
The best way to reduce your bond premium is to raise your credit score and improve your financial status. It’s also wise to select a trustworthy surety provider that offers bonds for affordable rates.
Apply for Your Brewer’s Bond Today
ZipBonds offers the fastest and most secure option for getting the surety bonds you need. Our all-digital platform is intuitive and straightforward. Apply online or call us at (888) 435-4191 to speak with an agent directly. We’ll help you get bonded in a zip!
Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”
Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.