Cigarette, Tobacco, and Vape Manufacturer Bonds

Get Your Pennsylvania Cigarette Stamping or Vape Manufacturer Bond

What are the Pennsylvania Tobacco Surety Bonds?

There are two main surety bond requirements in Pennsylvania. Each is different based upon what you business is specifically involved in.

Tobacco Stamp Consignment Bond

This is a surety bond requirement for tobacco wholesalers selling to retail outlets. Rather than pay for the tobacco tax stamps upfront, hey elect to purchase their tobacco tax stamps on consignment.

Electronic Nicotine Delivery System Bond (Vape Manufacturers)

This is a surety bond requirement for all companies that sell electronic nicotine delivery systems or vaping devices in the state.

Tobacco Tax Penalty Bonds

If you're a wholesaler and you have your license revoked due to failure to pay the appropriate amount of taxes, you could get approved for a new license. In these rare cases the Attorney General will make you purchase a surety bond to ensure you pay the appropriate tax liabilities.

Why is a Pennsylvania Cigarette Stamping or Vape Manufacturer Bond Required?

Remember, what is a surety bond? It's to help the state prevent fraud from licensed tobacco wholesalers and electronic nicotine deliver system companies.

The Pennsylvania Tobacco Stamp Tax Bond

As we mentioned, tobacco wholesalers can elect to receive their tobacco tax stamps on consignment. This helps free up cash flow with the taxes due within a 30 day period.

To make sure the wholesaling business pays those outstanding excise taxes, they make the company purchase a tobacco tax surety bond.

If the wholesaler does not pay the outstanding tax liability, the Attorney General can make a claim against the bond for the tax balance.

The Electronic Nicotine Deliver System Bond

There are three primary reasons the Attorney General decided to put this surety bond requirement into law:

Reason 1: Follow The Laws

They want to ensure that any manufacture of ENDS follows all state tobacco regulations and including the premarket tobacco product application marketing authorization (PMTA) requirements.

PMTA requirements are required through the FDA to demonstrate a manufacturer's tobacco product is "appropriate for protection of the public health."

Reason 2: Contraband Coverage

This surety bond provides the state non-tax payer money they can draw upon for the costs associated with destroying any illegal, uncertified, and contraband vaping products.

Reason 3: Legal Costs

The last reason is to help pay for any civil penalties, costs, and administered fees against the manufacturer for any of the above actions.

This is a common type of surety bond, typically referred to as a compliance bond or a tobacco surety bond. It's a common surety bond requirement in the cannabis industry like the:

• Oklahoma marijuana compliance bond
• California cannabis compliance bond

What Is The Pennsylvania Electronic Nicotine Delivery System Bond Amount?

The Pennsylvania Tobacco Stamp Tax Bond

The bond amount will typically always equal the amount of the tobacco tax stamps you take on consignment.

If you're a business with a good track record, you may be told to purchase a lower bond amount.

In some cases, after a set number of years you may be able to avoid purchasing the bond at all.

The Electronic Nicotine Deliver System Bond

In 99% of cases, the bond amount is set at $50,000.

The Pennsylvania Attorney General may require more than $50,000, but this will be on a case to case basis.

If you're notified that your amount is more than $50,000, it's typically due to the:

• History of your business in the tobacco industry
• Or potentially the size of the ENDS you'll be selling in the state

The $50,000 bond amount is the available funds the state can draw from to handle the clean up and legal fees of a fraudulent ENDS manufacturer.

How Much Does The Pennsylvania Tobacco Surety Bond?

Both of these bonds are going to require a custom price based on your business.

Here's how pricing for custom surety bonds works.

The surety, the insurance company that underwrites surety bonds, will look into three factors including:

• 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

From these factors they'll determine a rate based on their own processes and thresholds.

The price you pay will be the quoted rate multiplied by your specific bond amount.

It's one payment for your bond term which is typically 12 months from when you purchased your bond.

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

There are typically dozens of surety insurance companies that choose to underwrite this type of surety bond.

And while each uses the same information to determine a rate, the rates they end up quoting will be 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 $50,000 ENDS bond as the example since we know that exact bond 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 The Pennsylvania Tobacco Bond Bond Last?

This bond must be renewed on a yearly basis from when you purchase it.

So the prices from above, these are one payment for that 12 month period.

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..

When you're ready to get your tobacco surety 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.