How to Get a Washington State Liquor License

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Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. 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 Washington state liquor license. 

With access to a broad range of surety markets, our expert agents are ready to assist with all of your Washington alcohol tax bond needs.

What Are the Different Types of Washington Liquor Licenses?

There are more than two dozen retail alcohol sales licenses alone, classified according to what alcoholic beverages can be sold—whether for consumption on-premises or off-premises, the particular type of establishment, and more. Similarly, there are many different types of non-retail liquor licenses for business that manufacture, import, transport, distribute, or warehouse alcoholic beverages of different types. 

All Washington liquor licenses take the form of an endorsement on the state business license issued by the Washington Department of Revenue (DOR) Business Licensing Service.

What Are the Steps in the Licensing Process?

Getting a liquor license in Washington can be a complex and murky matter, complicated by the fact that you may need an additional local license or permit. The process involves applying for a new business license by submitting a Liquor and Cannabis Board Addendum request (retail or non-retail) or for the addendum only if you already have a valid business license.

Depending on the type of alcoholic beverage business you will be operating, you may need to apply for a federal basic permit from the U.S. Department of the Treasury, Alcohol and Tobacco Tax and Trade Bureau. 

Certain types of non-retail licenses also require the purchase of a Washington alcohol tax bond.

Why is a Washington Alcohol Tax Bond Required?

The term “alcohol tax bond” speaks to one of the main purposes of this type of surety bond—guaranteeing the payment of alcohol taxes owed to the state of Washington. But a Washington alcohol tax bond also serves as a type of license and permit bond because it guarantees that the licensee will operate in strict compliance with all applicable laws regulating the alcoholic beverage industry in the state.

The required bond amount is the greater of $3,000 or the total of the highest four months’ taxes owed during the previous 12 months. 

Failure to file tax reports or make required tax payments can result in the Washington State Liquor Control Board (the “obligee” requiring the purchase of the bond) filing a claim against the bond.

How Are Washington Alcohol Tax Bond Claims Paid? 

In addition to the obligee, there are two other parties to the surety bond agreement for a Washington alcohol tax bond, which is a legally binding contract. The licensee is the bond’s “principal” and is solely responsible, by law, for paying all valid claims against the bond. The company authorizing and guaranteeing the bond is the “surety,” which investigates every claim to make sure it is legitimate and should be paid.

Although the legal obligation to pay claims belongs only to the principal, the surety typically expedites resolution of a claim by paying it initially, on the principal’s behalf.  The principal’s obligation then shifts to repaying that debt to the surety. Failure to repay the surety can result in the surety taking legal action against the principal to recover the funds owed.

How Much Does a Washington Alcohol Tax Bond Cost?

While the obligee establishes the bond’s penal sum, the maximum amount that will be paid out on a single claim, the surety determines the premium rate the principal will pay. Multiply those two numbers, and the result is the annual bond premium. 

The main consideration in setting the premium rate is the underwriters’ assessment of the risk associated with paying claims on the principal’s behalf and waiting for reimbursement. That assessment is based in large part on the principal’s personal credit core. A high credit score leads to a low premium rate, potentially as low as one percent. Conversely, a lower credit score means the principal will pay a higher premium rate.

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Our surety bond professionals will get you the Washington State alcohol tax bond you need at a competitive rate.