Surety Bond Encyclopedia

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

Brief Summary

Moulton will not approve an alcohol license until this bond is in the City Clerk's hands, and the amount is $10,000 for each location, not per business. Two stores means two bonds or $20,000 of coverage. A surety bond lets you meet that requirement for an annual premium instead of tying up cash, and the bond simply stays in force for as long as you hold the license.

Under Section 1-17 of the Moulton Alcoholic Beverage Ordinance, Ordinance No. 2010-01, every person subject to a city alcohol license fee, privilege tax or excise tax must post a $10,000 bond for each business location. The bond, payable to the City of Moulton, guarantees prompt payment of those fees and taxes. It is delivered to the City Clerk before the City Council grants approval and must remain in place for the entire period the licensee owes city alcohol taxes or fees. The city application also accepts a bank letter of credit in place of the bond.

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

Count your licensed locations. Each one needs $10,000 of bond coverage.
Use the exact legal business name and location address shown on the Moulton alcoholic beverage license application.
Complete the bond application with owner details for the surety's review.
Pay the premium and receive the executed bond on the city's Alcohol License Tax Bond form.
Deliver the bond to the Moulton City Clerk before your application goes to the City Council.
Pay the city's nonrefundable $300 application filing fee and $35 advertising fee, plus $25 for each criminal history form.

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

What the bond guarantees

Moulton adopted its Alcoholic Beverage Ordinance, Ordinance No. 2010-01, on May 24, 2010, effective June 1, 2010. Section 1-17 requires each person subject to a license fee, privilege tax or excise tax under the ordinance to furnish a bond conditioned on promptly paying the city every amount owed under that article. The City of Moulton is the obligee. If a licensee falls behind on its annual license fee or its monthly tax, the city can recover the unpaid amount from the bond up to the penal sum, and the surety then looks to the licensee for repayment.

The amount is per location

The ordinance sets the bond at $10,000 for each location of the business that engages in activity subject to a city alcohol license or excise tax. An owner with more than one licensed location needs coverage for each one.

What the city collects

Annual license fees are due January 1 and become delinquent after January 31. Lounge, package store, restaurant and special retail liquor licensees also pay a monthly tax of 15 percent of gross receipts from alcoholic beverages other than beer and table wine, due by the 15th of the following month along with a report in the form the City Clerk prescribes. Late payments carry penalties, interest and citation fees set in the ordinance.

Filing and term

The executed bond, on the city's Alcohol License Tax Bond form, goes to the City Clerk. The application packet allows either a bond from an insurance company or a letter of credit from your bank. The bond must stay in force continuously while you are subject to the city's alcohol fees or taxes. A surety may cancel only by certified mail with 30 days' notice to the city, and it remains liable for acts before cancellation, so a cancellation notice leaves you needing replacement coverage before the 30 days run.

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

City of Moulton, Alabama named as obligee.
Bond amount of $10,000 for each business location subject to the city's alcohol license or excise tax.
Condition guaranteeing prompt payment of all license fees, privilege taxes and excise taxes owed under Ordinance No. 2010-01.
Continuous coverage for the whole period the licensee is subject to city alcohol fees or taxes.
Surety cancellation only by certified mail with 30 days' notice to the city.
A bank letter of credit is accepted by the city as an alternative to the surety bond.

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

I have two locations in Moulton. Is one $10,000 bond enough?

No. Section 1-17 sets the amount at $10,000 for each location engaging in activity subject to the city's alcohol license or excise tax. Confirm with the City Clerk whether the city wants separate bonds or one bond in the combined amount.

Does the bond apply to beer and wine licenses or only liquor?

It applies to every person subject to a license fee, privilege tax or excise tax under the ordinance, which includes beer and table wine licensees who pay annual license fees. The 15 percent monthly gross receipts tax applies to liquor sales by lounge, package store, restaurant and special retail liquor licensees.

Can I use a letter of credit instead?

Yes. The city application lets you present either an Alcohol License Tax Bond from an insurance company or a letter of credit from your bank.

How long does the bond have to stay in force?

For the entire period you are subject to Moulton alcohol license fees or taxes. It is not a one time filing. Keep it renewed every year you hold the license.

What does the bond cost?

You pay an annual premium that is a small share of the $10,000 amount. The surety sets it after reviewing the owner's credit and business history, and stronger credit generally means a lower rate.