Distilled Spirits Permit Bond
What is a distilled spirits permit bond?
A distilled spirits permit bond is a type of sales tax bond required on both state and federal levels. You must obtain surety bonds to become licensed to operate a business involved in selling, manufacturing, or warehousing distilled spirits.
- On the federal level, the bond covers the liability for federal excise taxes businesses owe on spirits.
- On the state level, the bond ensures all manufacturing businesses, warehouses, and sellers of distilled spirits pay state taxes.
These bonds may go by other names, including ATF bond (referring to the Bureau of Alcohol, Tobacco, Firearms and Explosives) or TTB bond (for the Alcohol and Tobacco Tax and Trade Bureau). The bond may also go by generic terms like brewer’s bond, alcohol bond, or liquor bond.
Types of Distilled Spirits
Distilled spirits include rum, gin, tequila, vodka, whiskey, and brandy.
Get Your Distilled Spirits Bond:
Quick Takeaways
- A distilled spirits permit bond is a type of sales tax bond required on both state and federal levels.
- You must obtain surety bonds to become licensed to operate a business involved in selling, manufacturing, or warehousing distilled spirits.
- These bonds protect the government from businesses that may falsify their records or fail to pay enough taxes, fees, and fines they owe.
- If you don’t follow the terms of your bond agreement, the government can revoke your business license.
What is the purpose of this bond?
Distilled spirits bonds protect the government from businesses that may falsify their records or fail to pay taxes, fees, and fines they owe. In short, it provides legal and financial protection for the government. If you fail to follow the terms of your bond agreement, the government can revoke your business license.
How does a distilled spirits bond work?
A distilled spirits permit bond is a three-party agreement between an obligee, a principal, and a surety.
- Obligee: The entity that requires the bond (the state or federal governing agency)
- Principal: The proprietor of a distilled spirits plant that must purchase a bond and abide by its terms
- Surety: The company that issues and backs the surety bond
The principal must comply with all applicable laws and regulations related to activities the bond covers. Requirements include paying all taxes on time and paying any penalties incurred or fines imposed. Learn more.
How much do distilled spirits permit bonds cost?
To obtain your distilled spirits permit bond, you’ll pay a premium, a fraction of the bond amount. Typical bond rates are 1% of the total bond amount and require a signed application, as well as business and personal financial statements.
For example, if you need a $15,000 bond and your rate is 1%, you’ll pay $150. Your credit score can have a significant impact on your premium rate. With excellent credit, you could get bonded for as little as 1% of the bond amount.
Do I need to renew my surety bond?
Your bond will be active for one year, and then you must renew it. At ZipBonds, we’ll notify you when your renewal deadline is approaching so you don’t miss it. Your state governing agency should outline bond terms and expiration dates for you. They will also be listed on your bond form.
How to Apply for a Distilled Spirits Permit
You can apply online for a Distilled Spirits Plant (DSP) permit. Make sure you have the following documents for your application:
- Distilled Spirits Bond
- A copy of your Articles of Incorporation and/or Certificate of Incorporation (for corporations)
- A copy of your Articles of Organization and/or Certificate of Organization (for LLCs)
- A copy of your partnership agreement (for partnerships)
- Proof of Property Ownership or Lease Agreement
- Signing Authority Authorization
- Diagram of the DSP
- Other documents that may apply to you (see the TTB website for details)
Apply for Your Distilled Spirits Permit Bond
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!
About ZipBonds.com
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.