Unexpressed Liabilities with Owning a Bar or Restaurant

Just like in other businesses, owning a bar can be very rewarding, but to make it successful you need planning. In many cases, the liabilities of owning a bar may seem high at the time you are starting the business. Despite this, there are major benefits if you follow a few requirements.

 

LiabilitiesĀ of Owning a Bar or Restaurant

With a liquor liability, you are protected from suits arising from damages related to intoxication. More to this, the liability of owning a bar gives you a guideline on how to handle the alcoholism of your staff. Despite your established work rules, the liability gives them a way to handle the job. More to this, it allows you to look for a policy that will cover them as patrons, an option that will help protect your business from liquor-related incidents.

Another common measure is to have your bartenders trained appropriately. One of the key benefits of training is equipping them with the knowledge on how to handle drunken customers as well as alcohol-related damages and fights. The training should be on a one-on-one basis with each of them owning an insurance scheme that will act as a shield against any incident that may occur at work.

 

Department of health

Legally, any company or restaurant that serves consumables to customers should take liability coverage. This is one of the best policies that help protect one from any alcohol-related incident once a patron has an incident in your bar. The legal fees from liquor-related claims are always higher than the insurance legal fees. To avoid such incidents, always protect your business from any liability through the adequate coverage.

Just like in restaurants, this legal policy goes hand in hand with the food inspection that you offer in your bar. The main aim of the inspection officers is usually to determine whether what you sell is within the legal frameworks and the requirements of the state. The process is always important as it helps protect your business from incidents that may emanate from the products you sell. The inspection is conducted at least twice a year meaning that you should always cooperate with the inspection officers.

 

Proper insurance

After you have worked hard to establish your business, you do not have to commence the operations immediately. Legally, once you acquire a liquor license to operate or use the premises you can. Also, the insurance policies that cover the liability of owning a bar may vary depending on where you live. It is therefore important to consider research on the specific needs of your state requirements on how to carry out the process.

While looking for suitable insurance agents, you should always be keen to get ones that are familiar with the different state laws. They should also be in a position to explain to you the specific coverage requirements that will be important for you. As a bar owner, you should always be ready for non-scheduled inspections on your premises. This is done following the state laws aimed at ensuring your insurance and other policies are in place and effective.

 

Fire department

More to the liabilities, your bar should always be inspected and awarded an occupancy permit. The bar is always prone to flammable decorations, a factor that would cause great mayhem if not looked into. A rigorous inspection on sprinklers and fire extinguishers should be conducted. Other injuries may emanate from accidental spills of either hot foods or beverages.

Ultimately, the customers and the owner of the bar feel the repercussions of any injuries. To avoid these altogether, safety evaluation is important through various independent bodies that inspect business premises to identify any hazards.

Taxes that Bar and Restaurant Owners Face

Purchasing a bar or restaurant can be a fun and profitable investment. However, it’s important to keep in mind the requisite taxes for owning a bar or restaurant, as these are part of the financial responsibilities that owners face. Here is a guide to the various taxes that you’ll need to pay for owning a bar or restaurant, as well as brief explanations of what each tax entails.

 

Sales Tax:

Like most businesses, bar owners and restaurant owners are required to pay a sales tax, which applies to any food that is prepared and sold to customers, as well as most beverages. Each individual sale has a tax applied to it, although food that you purchase for later retail doesn’t have sales tax applied by your supplier.

 

Job and Family Service Taxes:

Under Ohio state law, employers must register for an employer account number with the Department of Job and Family Services. (Registering as an Employer) This department regulates unemployment compensation taxes, which are paid by business owners. Once you receive an employer account number, you will be notified of the required contribution rate for this tax.

 

Workers Compensation:

Taxes for owning a bar or restaurant also include paying for Workers’ Compensation insurance, which are regulated by the Ohio Bureau of Workers’ Compensation (BWC.) Premium rates for workers’ compensation are decided by the BWC.

 

Payroll Taxes:

Payroll taxes are a major concern for any business owner, as unpaid payroll taxes actually cause more closures than unpaid income taxes. How do payroll taxes work? When you pay employees, federal income taxes, state income taxes, medicare, and other deductions must be withheld, and employers are responsible for the withheld taxes–this is what a payroll taxes is.

However, bar owners and restaurant owners can face payroll tax complications due to tip income for their employees. You are required to report tips that employees receive and pay social security and medicare taxes on tip income, but employees rarely report the entirety of their tips, and it’s difficult to track tips that aren’t put on credit cards. (Payroll Taxes) Because of this, you may end up liable for more than expected in a tip audit, although the IRS usually won’t question tips reported if they are 8% or more of wages.

 

City Taxes:

City taxes, sometimes referred to as municipal taxes, are paid in addition to federal income taxes and are regulated by the town or city your business is located in. While many cities don’t impose a local income tax, you’ll want to check city tax policies before purchasing a bar or restaurant.

 

Property Taxes:

Another of the taxes for owning a bar or restaurant is the property tax, which can vary greatly depending on the value of property where you live and how much tax revenue the various local, state and federal councils determine is needed. Property tax values also vary depending on an individual city’s need to pay for education, transportation, emergency services and parks, which are among the services usually funded by property taxes.

 

Liquor License:

Although it is not actually a tax, bars, and restaurants that serve alcohol, must renew their liquor license each year for a fee, which is paid to the state. Renewing your liquor license is required to sell alcoholic beverages in Ohio, just as it is in other states.

If you have questions or concerns about any taxes paid by bar or restaurant owners, you can contact Sokol and Associates, a brokerage firm based in Columbus, Ohio. Our expertise can help you navigate the taxes and fees required for owning a bar or restaurant in Ohio.