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 an Oregon liquor license.
With access to a broad range of surety markets, our expert agents are ready to assist with all of your Orgegon alcohol tax bond needs.
What Are the Different Types of Oregon Liquor Licenses?
Oregon requires licensing of businesses involved in importing, manufacturing, distributing, or selling alcoholic beverages. The Oregon Liquor Control Commission (OLCC) issues more than a dozen different types of licenses to such businesses.
What Are the Steps in the Licensing Process?
The process begins when you submit the appropriate application package to the OLCC office in your area, where it will be checked for completeness before it is accepted.
OLCC then gives you some paperwork that you will need to get approved locally by your city or county government. Local government approval is required before a license will be issued. This local review can take up to 45 days.
Once OLCC has received local approval, it conducts its own investigation, which can take one to two months to complete.
There are both local and OLCC application and/or processing fees that must be paid before a license will be issued. And in some cases, an Oregon liquor license bond is required.
Why is an Oregon Liquor License Bond Required?
Commonly referred to as OLCC license bonds or Oregon Alcohol Tax bonds, Oregon liquor license bonds guarantee that a licensee will do business in accordance with all applicable state laws regarding the production, distribution, and sale of wine and spirits. This includes remitting tax payments to the state. Any violation that results in a financial loss for OLCC or any other party can result in a claim for damages being filed against the bond up to the required bond amount, or “penal sum.”
OLCC has established the penal sum as $1,000 for brewers and winemakers, $10,000 for beer-only licenses, and $50,000 for licenses permitting beer, wine, and liquor sales.
How Are Oregon Liquor License Bond Claims Paid?
The surety bond agreement for an Oregon liquor license bond is a legally binding contract involving three parties: the obligee (OLCC), the licensee (the “principal”), and the company guaranteeing the bond (the “surety”). This contract makes the principal solely responsible for paying legitimate claims against the bond.
There’s a bit of a twist, though, in that the surety typically pays a valid claim initially and then is repaid by the principal. It’s a practice that ensures prompt resolution of a claim and gives the principal some time to repay the debt to the surety.
How Much Does an Oregon Liquor License Bond Cost?
In general, Oregon liquor license bonds for $10,000 or less do not require underwriting and are sold for a flat premium. Bonds for more than $10,000 do go through the underwriting process to determine the premium rate the principal will pay.
The surety’s primary consideration is the risk that the principal won’t repay the surety for claims paid on the principal’s behalf, requiring the surety to take legal action against the principal. Consequently, the underwriters will look closely at the principal’s personal credit core and financial stability to determine the appropriate premium rate.
With good credit, the premium rate for an Oregon liquor license bond could be as low as one percent.
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