Sales And Use Tax Bonds

What is a sales tax bond?

There are three parties involved in sales tax bonds: business owners and professionals obliged to collect sales tax on their goods or services, the government agency responsible for overseeing local sales tax activity, and a surety company.

The Obligee is the government entity that sets the rules that the business owner or professional (the Principal) must observe. The surety (also known as a bonding company) issues the bond, which guarantees the business owner's or professional's performance.

What is the purpose of a sales tax bond?

Some states require retailers and other types of enterprises that sell taxable goods or services to post sales tax bonds. The Department of Revenue is the government entity that normally mandates sales tax bonds.

When a surety company offers a bond, it assures the government agency that it will be compensated for financial losses incurred as a result of a business failing to pay its statutory taxes on time.

The surety will pay out any losses up to the bond amount if the business or professional fails to remit the right amount of sales tax on time. The corporation is ultimately responsible for the losses and must legally refund the surety company for any damages paid under the bond.

What is the cost of a sales tax bond?

The cost of a sales tax surety bond is determined by the total bond amount and the premium rate. The needed bond amount is specified by the government agency, and the premium rate, which is a percentage of the entire bond amount, is set by the surety firm.

Premium rates for sales tax bonds are normally 5% of the bond's total amount. The surety firm assesses your credit score, financial strength, and industry experience during the application procedure. Good credit applicants usually get the best rates, but weak credit will not preclude you from getting a sales tax bond.

Alabama offers premiums as low as $438.
Georgia offers premiums as low as $750.
Mississippi offers premiums as low as $100.

Most popular Sales And Use Tax Bonds

• Massachusetts Sales And Use Tax Bonds.

Other Sales And Use Tax Bonds categories

• California Sales And Use Tax Bonds.
• Colorado Sales And Use Tax Bonds.
• Florida Sales And Use Tax Bonds.
• Georgia Sales And Use Tax Bonds.
• Massachusetts Sales And Use Tax Bonds.
• Mississippi Sales And Use Tax Bonds.
• Missouri Sales And Use Tax Bonds.
• Tennesee Sales And Use Tax Bonds.

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