Alcoholic Beverages Tax ($75,000) Bond - Statewide in Tennessee

Brief Summary

Tennessee will not let a licensed wholesaler sell a single bottle until it has qualified with the Commissioner of Revenue, and posting this bond is part of qualifying. The Department's tax bond form lists the Alcoholic Beverages Tax Bond at $75,000. A surety bond satisfies it for an annual premium, where the other option the statute allows is a cash bond.

Tenn. Code Ann. § 57-3-303(f) requires every licensed wholesaler of alcoholic beverages to qualify with the Commissioner of Revenue before making sales, by furnishing a cash or surety bond each year of no less than 110% of its average monthly tax liability for the preceding twelve months. The Department of Revenue's Tax Bond form lists the Alcoholic Beverages Tax Bond at $75,000.00, payable to the State of Tennessee. Wholesalers with 3 consecutive years of operation and on time gallonage tax payments over the preceding 12 months are exempt.

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How to Apply for a Alcoholic Beverages Tax ($75,000) Bond:

• Obtain your wholesaler license from the Tennessee Alcoholic Beverage Commission.
• Register for alcoholic beverage taxes through TNTAP.
• Check whether you are exempt: 3 consecutive years in operation and on time gallonage tax payments over the past 12 months.
• Compare 110% of your average monthly tax liability with $75,000 and confirm the required amount with the Department of Revenue.
• Complete the surety application, then sign the Department's Tax Bond form in front of a notary.
• Attach the surety's power of attorney and file the bond with the Department before making any sales.

Detailed Information About the Tennessee Alcoholic Beverages Tax ($75,000) Bond:

$75,000 is the form figure, and the statute sets a floor

The Department of Revenue's Tax Bond form (revision 10/24) lists the Alcoholic Beverages Tax Bond at $75,000.00. The statute behind it, Tenn. Code Ann. § 57-3-303(f), frames the amount differently: the bond must be no less than 110% of the wholesaler's average monthly tax liability for these taxes during the preceding twelve months, and it is furnished annually. A wholesaler with a large monthly tax bill should confirm with the Department whether it needs more than $75,000 before the bond is issued.

New wholesalers

Before beginning business, a wholesaler files an initial bond for four months in an amount the Commissioner determines. At the end of that period the bond is adjusted to no less than 110% of the average tax liability for those first four months, for the balance of the twelve month period or until the following July 1, whichever comes first. It is adjusted every year after that.

Who is exempt

A taxpayer that has been in continuous operation for 3 consecutive years and, during the preceding 12 months, paid the gallonage tax imposed by § 57-3-302 on time does not have to execute and maintain the bond. The exemption ends when that taxpayer fails to pay the tax on time, and the bond must then be executed and maintained again.

What the bond covers

The form recites that the principal has applied for a Certificate of Registration to wholesale or distribute alcoholic beverages under Chapter 3, Title 57 of the Tennessee Code. It is conditioned on the principal paying all taxes, penalty and interest connected with wholesaling or distributing alcoholic beverages during the bond period. The tax is due on the first day of the month after the taxable sales and becomes delinquent if not paid by the 15th, and returns are due on or before the 15th of each month.

Filing details

The surety must be admitted or authorized by the Tennessee Commissioner of Insurance to write surety business in the state. The principal's signature and the surety attorney-in-fact's signature are both notarized, and a copy of the power of attorney is attached. The surety may cancel only on 60 days written notice to the Department of Revenue at the Andrew Jackson Building in Nashville. The wholesaler license itself comes from the Tennessee Alcoholic Beverage Commission, and tax registration is done through TNTAP.

Eligibility and Requirements for a Tennessee Alcoholic Beverages Tax ($75,000) Bond:

• State of Tennessee as obligee, filed with the Department of Revenue.
• A surety admitted or authorized by the Tennessee Commissioner of Insurance.
• Bond amount of $75,000.00 on the Department's form, and no less than 110% of average monthly tax liability under § 57-3-303(f).
• Notarized signatures for the principal and the surety's attorney-in-fact.
• Bond furnished annually, with 60 days written notice required before the surety can cancel.

Tennessee Alcoholic Beverages Tax ($75,000) Bond FAQs:

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