Tobacco Tax and Vape Manufacturer Bonds

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What are the Types of Mississippi Tobacco Surety Bonds?

There are three main tobacco related surety bonds in Mississippi. Each is different based on what your business is doing in the supply chain.

Tobacco Stamp Consignment Bond

This is a surety bond required by wholesalers and sellers of tobacco products if they elect to purchase their tobacco tax stamps on a consignment program with the Department of Revenue.

Tobacco Warehouse Storage Bond

This surety bond is required for businesses that store un-taxed tobacco products for the sole purpose of selling these products to licensed wholesalers.

Electronic Nicotine Delivery System (ENDS) Bond

This is a surety bond required by foreign (out of state) businesses that sell electronic nicotine delivery systems (ENDS) or vaping products to the Mississippi public.

Why is a Mississippi Tobacco Tax Bond Required?

Remember, the purpose of a surety bond is to prevent fraud. Here's what that means in regard to each of these tobacco surety bonds.

What Does The Mississippi Tobacco Stamp Tax Bond Do?

When a wholesaler sells tobacco products to retailers, they have to pay the tobacco taxes upfront. However, if they elect, they can receive the tax stamps on consignment to offset initial cost of the products.

To ensure these wholesalers pay for all taxes due within a 30 day requirement, they must purchase a surety bond in the amount of the tax liability.

What Does The Mississippi Un-Taxed Tobacco Warehouse Bond Do?

A business that is storing un-taxed tobacco products is only allowed to sell to licensed wholesalers in the state. These wholesalers are the businesses responsible for initially paying the tobacco taxes.

But the Department of Revenue wants to ensure these tobacco warehousing businesses don't sell products to the public or other businesses who can't legally pay the required tobacco excise tax.

So to hold these businesses accountable they require a surety bond typically in the amount of the tax burden to prevent this type of fraud.

What Does The Mississippi Electronic Nicotine Delivery System Bond Do?

This surety bond requirement does not apply to in-state businesses selling ENDS products, only foreign (out of state) companies.

The Department of Revenue wants to ensure these foreign businesses:

• Follow Mississippi laws including the FDA's Center for Tobacco Products clearance
• Pay for any destruction and clean up in the event of illegal contraband
• Assist in paying for any legal costs due to dealing with a business who is illegally selling vaping contraband

While the Mississippi electronic nicotine delivery system surety bond is under the Department of Revenue, it is not directly a tobacco tax surety bond.

Other compliance surety bonds include:

• Pennsylvania electronic nicotine delivery system bond
• Oklahoma marijuana compliance bond
• California cannabis compliance bond

What are the Mississippi Tobacco Surety Bond Amounts?

The following bond amounts are set by the Department of Revenue. Just to be clear, this is the maximum any one claim or multiple claims can be against your bond.

As you'll see, most of the amounts are going to be dependent.

The reason the tobacco tax bonds are custom is because it's based off or your tax liability. The Department of Revenue probably has a table with ranges, but they don't publish this on their site.

For the electronic nicotine delivery system product bond, you will have to keep that bond active for as long as you're doing business in the state.

While it's not guaranteed, it's common for tobacco tax bonds to no longer be required after you've shown at least 3 years of on-time compliance.

How Much Does The Mississippi Tobacco Surety Bond Cost?

Every tobacco surety bond in Mississippi is a custom priced surety bond.

At a high level all surety bonds are underwritten by a surety. A surety is a commercial division of an insurance company that chooses to underwrite specific bonds.

Here's how pricing for custom surety bonds works.

Any surety company that deals in electronic nicotine delivery system bonds will look at three primary factors when determining a price. These factors include:

• The personal credit of the owners
• Business history and potentially business financials (not always the case)
• The surety bond history if an owner has been bonded in the past

Based on these factors the surety will determine a rate. This rate they come up with multiplied by your bond amount is the price you'll pay for a 12 month period.

How You Can Save Hundreds When You Purchase Your Mississippi Tobacco Surety Bond

Every surety company that underwrites this bond determines their rate based on their own risk assessment of the applicant.

This means that rates from one surety to the next can be and typically are drastically different.

We are Surety Bonds Direct, a surety agency, and we price shop for our customers to find them the lowest possible price for the bond they need.

We do this every day and routinely see rates for the same applicant and the same bond come back 1%... 2%... even 3% different.

Here's a table with typical rates ranging from low to average. Let's use the $25,000 ENDS bond as an example since we know that is a set amount.

When you're ready to find your exact price so you don't have to guess or wonder, fill out our online quote form or call a bond specialist at 1-800-608-9950.

You will be able to get your exact price within a business day.

How Long Does A Mississippi Tobacco Surety Bond Last?

The Mississippi Department of Revenue does not have a hard expiration date for any of these surety bonds. This means you will have to renew it 12 months from the effective date (if you have to renew it).

You choose the effective (activation) date when you purchase your bond. It's almost always a few days before you submit for you certification as the bond must be active when you submit.

Renewing your bond is easy.

Your bond specialist will contact you 30 to 45 days in advance to make sure the renewal premium is paid on time so your bond remains active.

Once you pay the renewal premium, you don't have to do anything else. Your bond is active and you can continue selling your ENDS products in the state.

If you no longer need your ENDS surety bond, you can let it expire on its own.

When you're ready to get your electronic nicotine delivery system bond price, complete your quote request today. You can also call a bond specialist at 1-800-608-9950.

We will help you get pricing and have your bond officially issued, in your hands, in under 2 days.