What is a Sales Tax Surety Bond?

A sales tax surety bond is a legal contract a business owner signs guaranteeing they will collect the correct amount of sales tax for retail products sold and pay that amount to the state.

Some businesses are required to purchase a sales tax surety bond when they get their retail license.

Other businesses are only required to purchase a sales tax bond when they've had a history:

• Paying sales taxes consistently late
• Purposefully neglecting to pay sales taxes

When these businesses apply for their retail license, they will have to have purchase a surety bond before their license can be issued.

What Businesses Are Required To Purchase a Sales Tax Surety Bond

The businesses that are typically required to purchase a sales tax surety bond are selling:

• Cigarettes and tobacco products
• Nicotine products
• Marijuana products
• Alcohol sales
• Fuel sales
• Waste and disposal sales

A common example of of these surety bond are the:

• Texas mixed beverage gross receipts tax bond
• IFTA surety bond
• Marijuana dispensary bond
• California sales and use tax bond

What is the Sales Tax Bond Amount?

Sales tax surety bonds are unique because the bond amount you're required to purchase is unique to you and how much you're selling.

The more your tax liability goes up the higher your surety bond amount.

However, this is not always the case because many states will no longer require you to have an active sales tax surety bond after a few years of paying your taxes on time.

Learn more about sales tax surety bonds and how much a sales tax bond costs.

If you have questions, please call us at 1-800-608-9950.