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.

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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!

Fuel Tax Bond

This bond guarantees that sellers of fuel will pay all taxes to their state governement.

Alcohol Bond

Businesses selling, manufacturing or keeping alcohol in a warehouse frequently this type of bond.

Cigarette Tax Bond

Sellers of cigarettes and other tobacco products are often required to obtain this type of bond. It guarantees they will pay taxes on their sales.

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.

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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!

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

About the author:
Todd Bryant
Todd Bryant is a graduate of Germantown Academy and the University of Pittsburgh College of Business Administration Honors College. He has been President of Bryant Surety Bonds, Inc., an A+ rated Business with the Better Business Bureau, since 2007. Licensed as a producer with the Department of Insurance, he has been published in the National Association of Surety Bond Producers newsletter and on numerous authoritative publications such as The Washington Post, Entrepreneur.com, Azcentral.com and many more.