The California State Board of Equalization (BOE) can impose a licensed person to maintain an Alcoholic Beverage Tax Bond as a security deposit.
Licensed alcohol manufacturers, wine blenders, winegrowers, distillery manufacturer agents, wholesalers, rectifiers, importers, customs brokers, and direct wine shippers are required to make payment of taxes as a requirement of their licensure. And when necessary, the California Revenue and Taxation Code (RTC) section 6701 authorizes the BOE to require “any person” subject to use and sales tax law to post a security deposit to help ensure compliance.
When a security deposit is required, the taxpayer is sent a copy of Form BOE–598, Notice of Security Requirements circumstances.
The (BOE) decides whether security is required or not, and a surety bond from SuretyGroup.com will fulfill the security requirement. The bond amount will be no less than $500. For those who report taxes monthly, the amount will not be more than twice the estimated monthly tax. For those who report taxes during periods that are longer than one month, the amount will not be more than twice the estimated tax during the reporting period.
The bond form must have the same name as that issued on the license, have the physical address of the business (a PO Box will not be accepted), include the penal sum of the bond (which must match the amount listed in form BOE-598), and have an effective date.
A copy of Form BOE-598 Notice of Security Requirements Circumstances will need to be emailed to email@example.com or faxed to 404-351-3237 to verify the penal sum required.
As tax amounts change, the bond may need to be increased or decreased. In these circumstances, the Surety will need to be notified and a "Rider" will be issued to change the bond amount to stay in compliance with the Board.
In lieu of a bond, another form of security may be deposited with the State.
Failure to maintain a bond or other form of security could result in the loss of licensure.
The premium that you pay for a California Alcoholic Beverage Tax Bond is dependent on credit and the bond amount required. For bond amounts over $50,000 personal and business financial statements will be required.
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For more information, read our Blog on Alcohol Bonds.