Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. In this guide, we’ll walk you through how to get a New York liquor license.
With access to a broad range of surety markets, our expert agents are ready to assist with all of your New York alcohol tax bond needs.
What Are the Different Types of New York Liquor Licenses?
There are two main categories of New York liquor licenses: retail and non-retail. Retail licenses are further categorized as allowing on-premises or off-premises consumption. Only establishments that serve food qualify for an on-premises license. Non-retail licenses include those for wholesalers, manufacturers (brewers, distillers, vintners, etc.), distributors, importers, and warehouse operators.
Within these main categories, there are dozens of specific license types depending on the type of establishment or business activity and the type of alcoholic beverage: beer, wine, liquor (spirits) or some combination of these.
What Are the Steps in the Licensing Process?
Retail and non-retail licensing involve similar requirements, such as:
- Completing an application and providing specific supporting documents (e.g. photographs of principals and premises, a lease or deed, proof of liability and workers’ compensation insurance, etc.).
- Paying application and licensing fees
- For retail licenses only, providing proof of notification of community board or municipality and waiting 30 days thereafter to submit the license application.
- Purchasing a $1,000 surety bond. The required bond amount is $10,000 for wholesalers of wine and/or beer and $20,000 for wholesalers of liquor.
Why is an Alcohol Bond Required?
The New York Division of Alcoholic Beverage Control (ABC) requires an alcohol bond (sometimes referred to as an ABC bond or New Work liquor license bond) for these reasons:
- To ensure that licensees comply with the laws and regulations governing the alcoholic beverage industry in New York
- To guarantee payment of taxes, fines, and fees owed by licensees to the state of New York
- To provide a source of funds for paying claims for damages resulting from a licensee’s violations of the terms of the surety bond agreement
The bond forms a legally binding contract among ABC (the “obligee” requiring the bond), the licensee (the bond’s “principal”), and the company guaranteeing the bond (known as the bond’s “surety”).
How Are Alcohol Bond Claims Paid?
Each of the three parties to a New York alcohol bond has specific rights and responsibilities under the terms of the surety bond agreement. The legal obligation for paying valid claims against the bond rests solely with the principal.
Nevertheless, it’s normally the surety that pays a claim initially on behalf of the principal. This is essentially an extension of credit that must then be repaid to the surety by the principal. It’s a practice that ensures swift resolution of claims while giving the principal some breathing space before having to come up with the funds to cover a claim.
How Much Does a New York Alcohol Bond Cost?
New York alcohol bonds with a penal sum of $1,000 are typically sold for a relatively small flat fee, with no underwriting. Bonds for $10,000 or $20,000 go through underwriting and are old for an annual premium that is a small percentage of the penal sum.
The surety sets a premium rate for each bond based on the underwriters’ assessment of the principal’s creditworthiness. After all, the surety is counting on the principal for reimbursement of claims paid on the principal’s behalf.
A principal with a high personal credit score can expect to pay a premium rate in the range of one to three percent. Poor credit, however, can result in a premium rate in excess of ten percent.
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