Surety Bond Encyclopedia

Liquor Tax ($5,000) Bond - City of Homewood, AL in Alabama

Brief Summary

Homewood collects its own tax on liquor every month, and the bond gives the city security that those payments arrive. A surety bond meets that requirement for an annual premium, which leaves your cash for inventory instead of sitting on deposit at City Hall.

The Homewood Liquor Tax bond is a $5,000 surety bond payable to the City of Homewood that secures a licensee's municipal liquor tax payments. Homewood levies a tax of 10% on liquor purchases, reported on a monthly return due by the 15th. Late returns pick up a 10% penalty on the 16th day after the month of purchase and a 20% penalty on the 36th day.

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How to Apply for a Liquor Tax ($5,000) Bond:

Hold or apply for the appropriate Alabama ABC Board license and a City of Homewood business license.
Use the legal business name exactly as it appears on your city license.
Complete the bond application and review the premium quote.
Pay the premium and receive the executed $5,000 bond naming the City of Homewood as obligee.
Deliver the bond to the Homewood City Clerk.
File the Monthly Liquor Tax Return and pay the 10% tax by the 15th of each month.

Detailed Information About the Alabama Liquor Tax ($5,000) Bond:

What the city collects

Homewood requires licensees to file a Monthly Liquor Tax Return with the city. The return reports total liquor purchases for the calendar month and applies a tax of 10% of those purchases. It is sworn before a notary, due on the 15th of each month, and paid by check to the City of Homewood at P.O. Box 59666, Homewood, AL 35259. If it is late, the city adds a 10% penalty on the 16th day following the month of purchase and a 20% penalty on the 36th day.

Why a bond is required

Under Section 3-9 of the Homewood code, no one may sell alcoholic beverages in the city or its police jurisdiction without being licensed by the city, apart from state liquor stores. The code also requires liquor licensees to keep a bond with the city clerk, written by a surety authorized to do business in Alabama and in Homewood, conditioned on prompt payment of the license fees and taxes owed to the city. The bond on this page serves that purpose for the liquor tax. If a licensee fails to pay, the city can claim against the bond, and the surety pays up to $5,000 and then recovers that amount from the licensee.

Before you buy

The city keeps the bond on file with the City Clerk, and the code lets the clerk ask for additional security if claims reduce the bond's value. Confirm the required amount and the current bond form with the City Clerk's office before the bond is issued.

Eligibility and Requirements for a Alabama Liquor Tax ($5,000) Bond:

City of Homewood, Alabama named as obligee.
Surety authorized to do business in Alabama and in the city.
Bond kept on file with the City Clerk for as long as you hold the license.
Timely monthly liquor tax returns, since unpaid tax is what triggers a claim.
Credit review by the surety, which sets the premium.

Alabama Liquor Tax ($5,000) Bond FAQs:

What tax does this bond protect?

Homewood's municipal liquor tax, which is 10% of liquor purchases for the month. The return is due by the 15th of the following month.

What happens if I file late?

The city's return form adds a 10% penalty on the 16th day after the month of purchase and a 20% penalty on the 36th day. Unpaid tax and penalties can become a claim against the bond.

Can I post cash instead?

Section 3-11 of the city code lets a licensee deposit cash or readily marketable securities acceptable to the City Clerk in place of the bond. Most businesses prefer the bond so their cash stays available.

How is the premium set?

The surety prices the bond from the bond amount and the owner's credit and business history. Request a quote rather than relying on a published range.