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Oregon Direct Wine Shipper or Wine Self Distribution Permit Surety Bonds

The Oregon Liquor Control Commission (the Commission) regulates the sales and service of alcoholic beverages through direct shippers, manufacturers, wholesalers, bars, restaurants, grocery and convenience stores. Operators that are out-of-state direct shippers of cider wine and malt beverages and out-of-state wine self distributors are required to obtain a permit and in certain circumstances are required to have a surety bond.

Obligee and Bond Conditions:

The obligee is the entity that requires the bond. The Oregon Liquor Control Commission requires a $1,000 surety bond, other form of security or a waiver for out-of-state direct shippers of cider, malt beverages and wine or for out-of-state wine self distributors. A surety bond ensures payment of state privilege taxes and compliance of state regulations and laws. Failure to pay the required taxes, or comply or perform as required by state laws and regulations may result in a claim filed against the bond by the Commission. If the Commission files a claim against the surety bond, the owner (named as the principal on the bond form) will be responsible for repayment of the claimed amount if the claim is paid out by the surety.

The surety bond must be in place at the time the permit is applied for and during all business operations unless the applicant meets the waiver conditions. The premium will renew on the bond on an annual basis. If the direct shipper or wine self distributor business changes ownership, a replacement bond is required to fulfill the surety bond conditions. Failure to maintain the bond will result in penalties by the Department.

To qualify for a surety bond waiver the applicant must meet the state criteria. The waiver must be approved prior to the permit being issued or renewed. The criteria for waiver includes: filing privilege tax statements by the required due date; return of checks for payments for insufficient funds; any activity that is considered noncompliant by the state.

Applicants also have the option of providing an Assignment of Cash Certificate instead of a surety bond. The letter must be signed by a bank or financial institution acceptable to the state.

Surety Bond Requirements:

The original surety bond and power of attorney (provided by the issuing surety) will need to be submitted along with the permit or renewal to the Oregon Liquor Control Commission, PO Box 22297, Milwaukie, OR 97269.

If the applicant does not meet the waiver conditions, a $1,000 surety bond will need to be obtained to meet the Commission requirement.

Permit Requirements:

Complete the permit application and pay the applicable $50 fee. If the fee is received between October 31 through December 31, a total fee of $100 is required to cover the renewal fee.
Include with the permit application either the executed surety bond or the Bond Waiver Certificate or Assignment of Cash Certificate.

How Much Will This Bond Cost?

The premium that you pay for an Oregon Direct Shipper or Wine Self Distribution surety bond is dependent on credit. Our rates start at $100 for bonds under $10,000, and 1% of the amount for bonds over $10,000. Contact our Surety Bond Specialists for a free quote that fits your specific situation.

Did You Know?

Permits must be renewed by December 31st of each calendar year.