Surety Bond Encyclopedia

Alcohol Ordinance Tax or Fee ($10,000) Bond - City of Cullman, AL in Alabama

Brief Summary

City Council will not approve a Cullman alcohol license until the $10,000 tax bond has been delivered to the City Clerk. The bond lets the city rely on a surety company for the fees and taxes you will owe it, instead of asking you to hold cash on deposit. One bond amount covers one location, so a business with two sites needs coverage for each.

The City of Cullman requires every person subject to a license fee, privilege tax or excise tax under the Cullman Alcoholic Beverage Ordinance to deliver a bond guaranteeing prompt payment of those amounts to the city. The bond is $10,000 for each location of the business where licensed alcohol activity takes place, it names the City of Cullman as obligee, and it must remain in place continuously for as long as the business is subject to a license fee.

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How to Apply for a Alcohol Ordinance Tax or Fee ($10,000) Bond:

Count your Cullman locations. The bond is $10,000 for each location where licensed alcohol activity takes place.
Use the legal name of the licensee exactly as it appears on the City of Cullman alcohol license application.
Complete the bond application and review the premium quote.
Have the bond executed on a form naming the City of Cullman, Alabama as obligee, signed by the principal and the surety.
Deliver the bond to the City Clerk's Office with the in-person application, filing fee and issuance fee.
Keep the bond in force for the full licensure period and renew it with each calendar year license.

Detailed Information About the Alabama Alcohol Ordinance Tax or Fee ($10,000) Bond:

The $10,000 is per location

The figure most people get wrong is the scope. Section IX of the City of Cullman alcohol license application says the amount of the bond shall be $10,000 for each location of the person's business that is engaging in activity on which a license or excise tax under the ordinance is imposed. A restaurant group or retailer with more than one Cullman location needs $10,000 of bond coverage for every one of them.

What the bond guarantees

This is a tax and fee payment bond, not a general conduct bond. It is conditioned on the licensee promptly paying the City of Cullman all amounts required under the ordinance and any amendment to it, plus any license fee, privilege tax or excise tax that becomes due after the date of the bond. The city's application also notes a 12% liquor tax based on gross liquor sales, which is the kind of obligation this bond stands behind.

Who has to post it

The duty falls on each person subject to a license fee, privilege tax or excise tax imposed by the ordinance. That wording is not limited to bars and package stores. Beer, table wine, wholesale, special event, manufacturer and brewpub license types all appear on the same application and fee schedule.

No bond, no license

Where City Council approval is needed, it will not be granted until the bond has been delivered to the City Clerk. The application also says no privilege license will be granted, renewed, maintained or transferred while the City Clerk does not hold a valid and binding bond. The bond must stay in place continuously during the entire period the business is subject to a license fee. The surety can cancel by giving the City of Cullman 30 days notice by certified mail, but it stays liable for anything covered by the bond that the licensee did up to the date of cancellation.

The rest of the application

Cullman issues alcohol licenses on a calendar year basis, and licenses are not prorated or refunded. The Alcohol Review Committee reviews applications and recommends them to City Council. Completed applications go to the City Clerk's Office in person, delivered by the owner or manager. New licensees also pay a $300 nonrefundable filing fee and every licensee pays a $12 nonrefundable issuance fee on top of the license fee for its class. The application also calls for $300,000 of liquor liability insurance, criminal history release forms with a $25 payment per person to the Alabama Bureau of Investigation, and Alabama Responsible Vendor Program certification within 30 days of license approval.

Eligibility and Requirements for a Alabama Alcohol Ordinance Tax or Fee ($10,000) Bond:

Bond amount of $10,000 per location, under Section IX of the Cullman alcohol license application.
City of Cullman, Alabama named as obligee.
Condition: prompt payment of license fees, privilege taxes and excise taxes due under the Cullman Alcoholic Beverage Ordinance.
Continuous coverage while the business is subject to a license fee. Surety cancellation requires 30 days notice to the city by certified mail.
Separate $300,000 liquor liability insurance certificate. The bond does not replace it.

Alabama Alcohol Ordinance Tax or Fee ($10,000) Bond FAQs:

We have two locations in Cullman. Is one $10,000 bond enough?

No. The application sets the bond at $10,000 for each location of the business engaging in licensed activity. Two locations means $10,000 of coverage for each one.

We only sell beer and wine. Do we still need the bond?

The requirement applies to each person subject to a license fee, privilege tax or excise tax imposed by the ordinance. Retail beer and table wine licenses carry license fees under the same ordinance, so plan on posting the bond and confirm with the City Clerk's Office if your situation is unusual.

What does the bond actually protect?

It guarantees the City of Cullman that you will promptly pay the license fees, privilege taxes and excise taxes due under the alcohol ordinance. If you fail to pay, the city can claim against the bond, and the surety will look to you to repay what it pays out.

Can the surety cancel the bond?

Yes, by sending the City of Cullman 30 days notice by certified mail. The surety remains liable for covered acts up to the cancellation date. No license can be renewed, maintained or transferred while the City Clerk does not hold a valid bond, so a replacement needs to be on file before the cancellation takes effect.

How long does the bond need to last?

For as long as you hold the license. Cullman licenses run on a calendar year, and the bond must remain in place continuously during the entire period you are subject to a license fee.

What else does Cullman require besides the bond?

The application lists $300,000 of liquor liability insurance, criminal history release forms, a property description and plat, a building sketch, building and fire inspection clearance, a $300 filing fee for new licensees, a $12 issuance fee, and Alabama Responsible Vendor Program certification within 30 days of approval.