What is a Sales Tax Bond?
A sales tax bond is a surety bond which guarantees that a business will pay sales tax to the state or local government. The bond further guarantees that businesses will report their earnings within the relevant deadlines as they are determined in the state.
Failure to pay taxes or incorrect tax reporting can result in a bond claim. The purpose of the sales tax bond is to serve as a protection for the state and the public and guarantee compensation when taxes have not been paid.
Do I need this bond?
Sales tax bonds are usually requested by local governments and apply to different businesses depending on state regulations and laws. Unlike most financial guarantee bonds, the sales tax bond requires no collateral by bonding companies which makes it easier to obtain.
Whether you require this bond depends on your state’s laws on sales. Often, sellers of alcohol, tobacco, fuel, medical marijuana, and other similar products need to obtain this type of bond.
If you don’t know how bonds work, and why businesses are frequently required to get bonded, see our detailed ‘What is a surety bond’ guide for a full explanation.
For more information about the types of sales tax bonds, how much they cost, and how to get bonded, see below.
What Types of Sales Tax Bonds Are There?
Often, a general sales tax bond or sales and use tax bond will be enough for businesses.
Certain businesses though, such as those selling tobacco, alcohol, or fuel, may need to get a special bond. This, too, depends on state regulations, so applicants who are not sure what kind of bond they need should check with the relevant government institutions and agencies.
For more information see our list below with the most popular sales tax bonds by state!
Popular Sales Tax Bonds
How Much Does a Sales Tax Bond Cost?
Sales tax bond cost is strongly dependent on the amount of the bond that you need to obtain. Bond amounts are set by state governments.
What is the bond amount for my business?
As a general rule, the full amount of your sales tax bond is based on your receipts or an estimate of the sales taxes you need to pay at the end of the year. Sometimes, this can also be based on the monthly tax liability instead of the yearly.
To get an accurate amount for your sales tax bond, make sure to check with the government department or agency that requires you to get bonded. Many departments also have calculators on their websites, which help you determine the amount of your sales tax bond.
How is the cost of my bond determined?
The cost of your surety bond will be based on your bond amount. Sureties consider the personal credit score of applicants as the most important factor when calculating their rate. The higher your credit score, the better your rate will be.
Standard market rates for sales tax bonds begin at 1% of the total bond amount for applicants with a credit score of 700. Applicants with a credit score between 650-699 can expect a rate between 2%-5% on their bond.
Try our bond calculator below to get an estimate of the cost of your sales tax bond.
Surety Bond Cost Calculator
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Can I get bonded if I have low credit?
Yes, applicants with low credit can also get bonded successfully.
Due to the nature of sales tax bonds and because underwriting bonds for such applicants carries a greater risk, rates on sales tax bonds start at 5% and may be as high as 15% or more!
Improving your credit score is paramount if you wish to get a better rate on your bond. The more you improve your score, but also your financials, the lower your rate will be in the future when you renew your bond!
How Do I Apply to Get Bonded?
To get started, complete our initial bond application form. We will then get in touch with you and provide you with a free quote on your surety bond. You can then proceed with finalizing your application and will get your bond in a very small amount of time.
Call us at (866) 450-3412 to speak one of our experts if you have any questions related to sales tax bonds. If you’re not sure what kind of bond you need or how to apply, we will gladly help!CACHEFILE: /var/www/vhosts/bryantsuretybonds.com/blog/../bond-form/cache/temp-f3199b8e8563ee48c534293797efe56a.cache
Find the Bond You Need
The table below contains a list of only the most popular surety bonds. If you can't find yours, fill out our online application and select "Not in the list".
|Alaska||Tax Liability Bond||Municipality Of Anchorage||Apply Now|
|Alaska||Room Tax Liability Bond||Municipality Of Anchorage||Apply Now|
|Arizona||Taxpayer Bond for Contractor||Arizona Dept Of Revenue: Taxpayer Information||Apply Now|
|California||Parking Tax Collection||City and County of San Francisco||Apply Now|
|California||Bond of Seller||State Board of Equalization||Apply Now|
|California||User of Fuel Bond||State Board Of Equalization||Apply Now|
|Colorado||Medical Marijuana License||Department of Revenue||Apply Now|
|Colorado||City & County of Denver Retail Marijuana License B||City and County of Denver||Apply Now|
|Colorado||Retail Marijuana License Bond||Dept of Revenue, Marijuana Enforcement Division||Apply Now|
|Colorado||Retail Marijuana Excise Tax Bond||State of Colorado, Department of Revenue||Apply Now|
|Colorado||Medical Marijuana License Bond||City & County of Denver||Apply Now|
|Colorado||(City of Lafayette, CO) Retail Marijuana License B||City of Lafayette||Apply Now|
|Colorado||(City of Aurora, CO) Retail Marijuana Establishmen||City of Aurora - Marijuana Enforcement Division||Apply Now|
|Delaware||Non-Resident Contractor||Division of Revenue||Apply Now|
|Federal Government||Food Stamp Collateral Bond||US Department of Agriculture, Food and Nutrition||Apply Now|
|Florida||Sales and Use Tax Bond||Florida Department of Revenue||Apply Now|
|Indiana||Permit Fee Bond||Indiana Department of Revenue - OSW Services||Apply Now|
|Kentucky||KENTUCKY HIGHWAY USE||Commonwealth of Kentucky||Apply Now|
|Local Government||Sales, Use & Consumer Tax Bond||State Board of Equalization||Apply Now|
|Local Government||Meal Tax Bond||City of Portsmouth Commissioner of the Revenue||Apply Now|
|Mississippi||Sales Tax||Department of Revenue||Apply Now|
|Missouri||Transient Employer Bond||Missouri Department of Revenue||Apply Now|
|Missouri||Sales & Use Tax Bond||Missouri Dept of Revenue & Taxation Division||Apply Now|
|Nevada||SURETY BOND POSTED TO SECURE PERFORMANCE UNDER TIT||State of Nevada||Apply Now|
|North Dakota||Sales and Tax Permit||Office of the State Tax Commissioner||Apply Now|
|Oklahoma||Land Application Company Bond||Oklahoma Corporation Commission||Apply Now|
|Oklahoma||Gross Production Tax Bond||Oklahoma Corporation Comission Oil and Gas Divisio||Apply Now|
|Oregon||Miscellaneous Taxes Bond||Department of Transportation Division||Apply Now|
|Oregon||Highway Use Tax Bond||DOT Motors Carrier Transportation Division||Apply Now|
|South Carolina||Right Of Way Bond||SC Dept of Trans||Apply Now|
|South Dakota||South Dakota Department of Revenue & Regulation Un||South Dakota Department Of Revenue and Regulations||Apply Now|
|Texas||Combative Sports Bond For Gross Receipts Tax||TX Dept of Licensing and Regulation||Apply Now|
|Texas||Continuous Bond of Seller (Sales Tax)||Dept. of Licensing||Apply Now|
|Texas||Customs Broker||Texas State Comptroller||Apply Now|
|Utah||Sales Tax Bond||Utah State Tax Commission||Apply Now|
|Vermont||BOND TO STATE OF VERMONT||State of Vermont Dept Taxes||Apply Now|
|Virginia||Meal Tax Bond (City Of Norfolk)||City Of Norfolk||Apply Now|
|Virginia||Tax Bond||Virginia Dept of Taxation||Apply Now|
|Virginia||Meal Tax Bond (City of Norfolk)||City of Norfolk||Apply Now|
|Virginia||Food & Beverage Tax Bond (City of Hampton)||City of Hampton||Apply Now|
|Virginia||Meal Tax Bond (City of Portsmouth)||City of Portsmouth||Apply Now|
|Virginia||Meal Tax Bond (City of Norfolk)||City of Norfolk||Apply Now|
|Wisconsin||Sales & Use Tax||Wisconsin Dept of Revenue||Apply Now|
|Wyoming||Sales and Use Tax Bond (Multiple Contracts)||State of Wyoming||Apply Now|