If you have a sales tax permit in Texas you may have been requested to also obtain a Texas sales tax bond upon getting licensed. According to the Texas Administrative Code (TAC) this bond must be renewed by December 31 each year. Here’s what you need to know about your bond renewal.
Texas Sales Tax Bond Requirement
According to Title 34, Part 1, Chapter 3, Subchapter O (State and Local Sales and Use Tax) of the TAC, the Texas Comptroller of Public Accounts may require you to obtain a Texas sales tax bond, also known as a Texas continuous bond of seller, in some of the following cases:
- Upon applying for a sales tax permit
- Upon becoming delinquent in paying taxes, penalties, and other due accounts
- Upon being asked by the Comptroller to obtain an additional bond after becoming delinquent
- Upon changing the legal structure of your business (such as from sole ownership to partnership or from partnership to corporation)
- In a variety of other instances
When being asked to obtain such a bond, the Comptroller will notify you of the amount of the bond which you need to obtain. This amount can be equal to four times your average monthly tax liability or $100,000 – whichever is greater.
Though the bond is continuous, meaning that it is automatically extended at the end of each year, it still expires if you do not pay your yearly premium. Below are the details concerning your bond renewal.
Texas Sales Tax Bond Renewal
When your bond is about to expire and you need to pay your renewal premium you will typically receive a notification from your surety.
If your bond amount has remained the same and if your credit score has not improved or declined in any significant way, you can expect to receive a similar rate as the one you paid last time. If your score or other financial indicators have changed more significantly, your surety will offer you a different rate.
To find out more about how your credit score and bond cost are linked together, make sure to visit our surety bond cost page.
If you are bonded with us, we will inform you of your upcoming bond expiration well in advance. To renew your bond, you simply need to fill out our online application. When notifying you, we will also provide you with a new quote for your bond, based on your current credit status.
If you’re considering changing your surety bond agency and would like to receive a free quote on your Texas sales tax bond, follow the above link and submit an application. We can also bond applicants with lower credit scores through our Bad Credit Program thanks to the many sureties we work with who provide us with great rates on all bonds.
Get in touch with us at (866) 450-3412 if you have any questions about your bond renewal or bond quote!