Fuel Tax And Distributor Bonds

What is a fuel tax bond?

Fuel tax bonds (also known as motor fuels tax bonds, gasoline distributor bonds, or International Fuel Tax Agreement [IFTA] bonds) are legally binding agreements between three parties: suppliers and consumers of specific types of fuel, the government body responsible for regulating motor fuel sales, and a surety firm.

The Obligee is the government entity that sets the rules that the gasoline seller (the Principal) must observe. The surety (also known as a bonding business) issues the bond that guarantees the fuel seller's performance.

What is the purpose of a gasoline tax bond?

State authorities and the Internal Revenue Service (IRS) both need fuel tax bonds for all dealers of motor fuel. Certain consumers, distributors, suppliers, importers, and exporters of various fuel kinds are also required to post bonds.
These entities must register with the Internal Revenue Service (IRS) and acquire a bond to assure that all taxes owed to the US government are paid.

When the surety business issues the bond, it assures the state agency and the IRS that they will be paid for the full amount of the fuel seller's tax liability on time. The surety will cover any damages up to the bond amount if the gasoline vendor fails to pay the required taxes on time. The fuel supplier is ultimately responsible for the losses, and he or she is legally obligated to refund the surety business for any damages paid under the bond.

What is the cost of a gasoline tax bond?

The cost of a fuel tax surety bond is determined by the total bond amount and the premium rate. The bond's overall value is determined by the principal's financial capabilities, tax history, and predicted tax liabilities. Your premium rate, which is a percentage of the total bond amount, is determined by the surety firm.

Fuel tax bonds typically have premium rates ranging from 1% to 4% of the overall bond amount. The surety firm assesses your credit score, financial strength, and industry experience during the application procedure. Applicants with good credit usually get the best rates, but weak credit won't keep you from getting a gasoline tax bond.

Oregon offers premiums as low as $375.
Vermont offers premiums as low as $175.

The most prevalent Motor Fuel Tax and Distributor Bonds

• Kentucky Motor Fuel Tax And Distributor Bonds.
• Nebraska Motor Fuel Tax And Distributor Bonds.

Other categories for Motor Fuel Tax and Distributor Bonds

• Alabama Motor Fuel Tax And Distributor Bonds.
• California Motor Fuel Tax And Distributor Bonds.
• DC Motor Fuel Tax And Distributor Bonds.
• Florida Motor Fuel Tax And Distributor Bonds.
• Georgia Motor Fuel Tax And Distributor Bonds.
• Illinois Motor Fuel Tax And Distributor Bonds.
• Kentucky Motor Fuel Tax And Distributor Bonds.
• Mississippi Motor Fuel Tax And Distributor Bonds.
• Missouri Motor Fuel Tax And Distributor Bonds.
• Nebraska Motor Fuel Tax And Distributor Bonds.
• New York Motor Fuel Tax And Distributor Bonds.
• North Carolina Motor Fuel Tax And Distributor Bonds.
• South Carolina Motor Fuel Tax And Distributor Bonds.
• Tennesee Motor Fuel Tax And Distributor Bonds.
• Texas Motor Fuel Tax And Distributor Bonds.

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