The Missouri Sales Tax Bond Requirement
In order to make sure that retailers pay sales or use tax, the Department of Revenue requires them to post a sales tax bond. This bond essentially guarantees that retailers will pay sales tax and declare their revenue truthfully and on time. They are also obliged to pay all interest, additions to tax, and any penalties they have received.
Most Missouri retailers are required to post this type of bond, though several industries are exempt. The rest can be exempt after two years of tax compliance, though under a new law that came into effect in August 2016, the exemption can happen after only one year.
Like other types of surety bonds, the Missouri sales tax bond is a binding agreement between three parties: a principal (the retailer), an obligee (the Department of Revenue), and a surety (the bond underwriter). Failure to comply with terms of the sales tax bond can lead to a claim filed against the retailer. All valid claims must be reimbursed by the principal.
Be sure to get acquainted with Section 144.087 of the Revised Statutes of Missouri, to better understand your responsibilities and avoid claims on your surety bond.
Start your online application now and you’ll receive a free bond quote from us. If you need any assistance, simply call us at 866.450.3412.
Continue reading for more information on sales tax bonds in Missouri.
Missouri Sales Tax Bond Calculator
The amount of coverage your sales tax bond offers (also known as a total bond amount) is not fixed, as is the case with many surety bonds. Instead, it depends on your average monthly gross sales for the last 12-month period. Starting businesses will need to provide an estimation of their expected sales.
The website of the Department of Revenue has a sales tax bond calculator where you will get an idea of your sales tax bond amount based on your location and average monthly sales. The formula looks like this:
Actual (or estimated) average monthly gross sales X the tax rate in your location X 2
When you round to the nearest $10, you will get your total bond amount required. However, don’t forget that this is the coverage the bond offers to claimants, not the amount you need to pay. Instead, retailers pay an annual premium, which is just a few percent of the total amount. It mostly depends on your personal credit score. After you have calculated your total bond amount, you can use our surety bond cost calculator to get an estimate of your premium as well. The same page contains some valuable cost-saving tips, which may come in handy.
Important: It is best to verify with the Department of Revenue what the total bond amount for your tax bond is. The state can require a higher bond amount at their own discretion. Similarly, our bond cost calculator offers only an estimate. Your actual premium can only be determined after your submit your application.
Getting a Missouri Sales Tax Bond with Bad Credit
Missouri sales tax bonds are considered high-risk, meaning that they are subject to more underwriting consideration. Factors such as a bad credit score, no previous credit history, or past delinquencies are considered red flags, which involve a higher risk for surety bond companies.
If you have bad credit, you will still be able to get bonded, though at a higher premium rate. Whereas, standard rates vary between 1% and 5%, bad credit surety premiums are more often in the 15%-17% range. Thanks to our Bad Credit Program and the expertise of our surety agents, you can build a strong application, increasing your chance of getting bonded at the lowest possible price.
Missouri Sales Tax Bond Form
In order to prepare for your application, you can take a look at the Missouri sales tax bond form, also called Form 331, which we have provided to use as reference. You will be asked to indicate what bond type you’re applying for, provide a federal employer I.D. number, ownership information, and total bond amount.
Don’t worry about filling it out: once you submit our online application, our surety agents will help you with all the paperwork.
Start your Missouri Sales Tax Bond Application Today!
The application process is simple, thanks to our one-page online application. After submitting it, we will be in touch with you to give you a free bond quote, and guide you through the rest of the process.
When you have submitted all the necessary paperwork, we can proceed with getting your bond issued. You will receive a digital copy of your sales tax bond in your email, and the original bond form will be send to you by mail. Remember, the Department of Revenue only accepts the original bond form and not a copy of it.
