(a) All persons, firms, corporations, joint-stock companies, syndicates or associations in this state storing, selling, distributing and/or manufacturing beer in this state shall execute a bond securing the payment of the taxes levied, as the state privilege tax, under provisions hereof, the bond to be payable to the commissioner of revenue and to be signed by some solvent surety company residing in or having an office and agent in this state, and to be approved by the commissioner.

(b) Such bond shall be conditioned upon and posted to secure the proper payment of all taxes for which the taxpayer may become liable during the taxpayer's initial license period of twelve (12) months, in the minimum penal sum of twenty thousand dollars ($20,000); provided, that after monthly reports have been received by the department which cover the initial three (3) full months of such person's operating experience, the penal sum may, upon written request of the taxpayer, be adjusted to an amount equal to no less than twice the amount of the tax required to be paid by such person per month and shall be determined by averaging such tax over the period of months immediately preceding the adjustment. If, at any time after the initial three (3) months operating experience, the commissioner shall determine the average monthly tax liability of a taxpayer to be greater than twenty thousand dollars ($20,000), the taxpayer shall be required to immediately file a rider to the taxpayer's bond to increase the penal sum of the bond to two (2) times the taxpayer's average monthly tax liability as determined by the commissioner.

(c) If, at any time after the execution of the bond, the surety thereon shall become insolvent, the commissioner may require the execution of a new bond with good and solvent surety in the same manner and with the same penalty as aforementioned, and subject to the approval of the commissioner, and any person executing a bond under this chapter may, at any time prior to default under any existing bond, apply to the commissioner for cancellation of the existing bond and for leave to file a new bond with new surety thereon in accordance with the provisions aforementioned, and shall have the right to file such new bond, at such time, by and with the approval of the commissioner.

(d) In lieu of a corporate surety on such bond as required by subsection (a), the commissioner may allow the applicant to secure such bond by depositing collateral in the form of a certificate of deposit as accepted and authorized by the banking laws of this state, which has a face value equal to the amount of the bond. Such collateral may be deposited with any authorized state depository designated by the commissioner.

(e)

(1) If a taxpayer has been in continuous operation for three (3) consecutive years and during the preceding six (6) months has paid the special privilege tax in § 57-5-201(a)(1), for which the taxpayer is liable within the time period for payment set by the statute or rule, then the taxpayer shall not be required to execute and maintain any bond required by this section.

(2) Any taxpayer exempted from the bonding requirement of this section who fails to pay the special privilege tax in § 57-5-201(a)(1), within the time period for payment set by statute or rule shall, upon such failure, be required to execute and maintain a bond as required in this section.