A Reminder for P&C Agents: Year-End Bond Renewals for Texas Bars, Restaurants, and Retailers
As the calendar year comes to a close, businesses across Texas are finalizing their financials, reviewing their tax obligations, and renewing necessary licenses. Bars, restaurants, and retailers have another critical task on their to-do list: renewing their state-required surety bonds.
Texas requires businesses in the hospitality and retail sectors to purchase several surety bonds, including Sales Tax Bonds, Mixed Beverage Tax Bonds, and Mixed Beverage Gross Receipts Tax Bonds. These surety bonds ensure compliance with Texas state tax laws and regulations.
If you’re a Property and Casualty (P&C) insurance agent who underwrites commercial insurance, you’ll want to make sure your Texas-based clients are aware of these requirements. This way, you can ensure they don’t miss the upcoming December 31st expiration date.
Below, we’ll break down these three bonds, what they cover, and how you can help your clients avoid the risks associated with their expiration. We’ll also explore the benefits of reminding your commercial clients about their renewal responsibilities.
3 Essential Surety Bonds for Texas Bars, Restaurants, and Retailers
Texas state law mandates that certain businesses purchase specific surety bonds to protect the state’s tax revenue. These bonds guarantee that businesses will fulfill their tax obligations and comply with state laws, including Texas Alcoholic Beverage Commission (TABC) regulations.
Here’s a breakdown of the three surety bonds your commercial clients may require:
#1 Sales Tax Bond
In Texas, retailers of all types must purchase a Sales Tax Bond, also known as a Continuous Bond of Seller. This bond is designed to make sure retailers remit their sales taxes to the Texas Comptroller on time after collecting them from their customers. If a retailer fails to pay their sales taxes, the Comptroller can use this bond to cover their outstanding taxes and penalties.
Sales Tax Bond amounts are based on retailers’ total revenue accrued over the past year. Retailers typically need to purchase a bond amount that is at least four times their average monthly tax liability, up to $100,000.
As a P&C agent, reminding your clients to renew their Sales Tax Bonds can save them from a slew of unpleasant legal and financial consequences, ranging from hefty penalties to an inability to conduct business in Texas.
#2 Mixed Beverage Tax Bond
Mix Beverage Tax Bonds ensure that bars, restaurants, and other establishments that sell alcoholic beverages for on-site consumption pay their mixed beverage taxes. After collecting these taxes from customers, retailers must report them to the Texas Comptroller every month.
Mixed Beverage Tax Bond amounts can range from $3,750 to $100,000+, depending on your clients’ business type and estimated tax liabilities. If your clients’ mixed beverage tax bonds expire, they can face serious penalties, including the suspension of their alcohol license.
Since alcohol-based beverages make up an average of 21% of full-service restaurants’ total sales, operating without an alcohol license can seriously hurt their revenues. Thus, your clients will appreciate a timely renewal reminder.
#3 Mixed Beverage Gross Receipts Tax Bond
Lastly, some of your clients may need to renew their Mixed Beverage Gross Receipts Tax Bond. Like the Mixed Beverage Tax Bond, this bond is required for all Texas businesses that sell alcoholic beverages for on-premises consumption, including:
- Restaurants
- Bars
- Taverns
- Hotels
- Resorts
- Event venues
- Clubs
- Brewpubs
The key difference is that this bond pertains to mixed beverage gross receipts taxes, which are paid by the permit holder rather than the customer. Thus, Texas retailers can’t add these taxes to their sales prices or deduct them from their revenues; they must pay them directly to the Texas Comptroller based on their gross receipts.
Inadequate bond coverage can lead to suspension or revocation of your clients’ alcohol license. By reminding your clients to renew their Mixed Beverage Gross Receipts Tax Bonds before the annual deadline, you can help protect their ability to operate and avoid costly sanctions.
When Should Texas Businesses Renew These Bonds?
All three of these bonds must be renewed by December 31st of each year. To ensure a timely renewal, your clients should submit their bond renewal applications a couple of weeks in advance.
This renewal date is coming up fast, so it’s the ideal time to reach out to your clients in the restaurant, bar, and retail sectors to remind them of their requirements.
3 Benefits of Reminding Your P&C Clients of Their Surety Bond Requirements
As an insurance agent, your role is to help your clients manage risk—and that includes ensuring that they meet all legal and regulatory requirements. By reminding them of their bond renewal deadlines, you can improve your:
- Clients’ operational and financial stability – Clients who fail to renew their surety bonds may not be eligible to renew their state licenses or TABC permits and risk incurring costly penalties. For businesses that receive a significant portion of their revenues from alcohol sales, these setbacks can be financially crippling.
- Client trust and retention – By staying on top of these renewal requirements, you can demonstrate your commitment to your clients’ long-term success. Proactively reaching out about their bond renewals can strengthen your relationship and position your P&C agency as their trusted compliance advisor for years to come.
- Revenue – As a P&C agent, offering bond renewal services is an excellent way to increase your revenues while providing added value to your commercial clients. Sales Tax, Mixed Beverage Tax, and Mixed Beverage Gross Receipts Tax Bonds offer valuable cross-selling opportunities.
Learn more: 6 Types of Bonds Your Contractor Clients Might Encounter
How BOSS Bonds Can Help
With everything else on their plates, your clients may feel overwhelmed about renewing their Texas bonds. Fortunately, with the right surety bond partner, you can simplify the process for them considerably.
At BOSS Bonds, we make it easy for P&C agents to help their clients secure and renew their Sales Tax, Mixed Beverage Tax, and Mixed Beverage Gross Receipts Tax Bonds. Your clients can purchase these bonds instantly within our convenient online platform.
Here are the links to these bond applications:
- Sales Tax Bond Application
- Mixed Beverage Tax Bond Application
- Mixed Beverage Gross Receipts Tax Bond Application
If your clients are unsure about which bond they need, our team of surety specialists can help them identify the correct bond for their business type.
Support Your Commercial Clients’ 2025 Surety Compliance With BOSS Bonds
With 2025 fast approaching, now is the perfect time to remind your commercial clients about their Texas state-required bond renewals. Doing so can set them – and your P&C agency – up for success.
At BOSS Bonds, we have over 40 years of surety experience. With our dedicated customer service and competitive rates, we can help your clients comply with their Texas surety bond requirements with confidence.
Ready to become your clients’ go-to risk management resource? Partner with BOSS Bonds today.
Sources:
TABC. TABC Code and Rules.
https://www.tabc.texas.gov/texas-alcohol-laws-regulations/tabc-code-rules/
Texas.gov. Chapter 151 Tax Code.
https://statutes.capitol.texas.gov/Docs/TX/htm/TX.151.htm
Texas Comptroller. Mixed Beverage Taxes Frequently Asked Questions.
Texas Comptroller. Security Bonds For Texas Mixed Beverage Taxpayers.
https://comptroller.texas.gov/taxes/mixed-beverage/security-bonds.php
National Restaurant Association. Alcohol beverage services overflowing with potential to draw customers, drive sales.
Texas Comptroller. Mixed Beverage Gross Receipts Tax.
