South Carolina Tobacco Tax Bonds

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What are the Types of South Carolina Tobacco Surety Bonds?

There are two different types of surety bonds for businesses selling tobacco in South Carolina.

Tobacco Stamp Consignment Bond

This is the primary tobacco bond in the state for wholesalers. When you purchase your tobacco stamps, you have the option of buying them on consignment with the promise to pay back the full amount within 30 days.

Other Tobacco Products Penalty Bond

Other tobacco products include:

• Cigars
• Cheroots
• Stogies
• Snuff

Plus many other examples, essentially everything else but cigarettes. But if you sell these products and you miss two tax filing periods in a 12 month period, you may be required to purchase a surety bond.

This bond would be for the tax liability you currently have. These are typically required when you get your registration re-issued to prove you can pay your tax liabilities on time.

Why is a South Carolina Tobacco Tax Bond Required?

Remember, the purpose of these surety bonds is to ensure you pay your taxes and follow the laws for selling tobacco in the state. Bottom line, to prevent fraud.

What Does The South Carolina Tobacco Stamp Tax Bond Do?

As a wholesaler, if you elect to purchase your tobacco stamps on consignment, you have 30 days to make the full payment for that allotment of stamps.

If you fail to make this payment, the Department of Revenue has the option of making a claim against your surety bond to recoup this tax payment.

What Does The South Carolina Other Tobacco Products Bond Do?

This is essentially the same type of surety bond with one major difference, it's only required after a business fails to pay taxes.

In many cases, when a business fails to pay taxes on time, they can have their license or registration revoked. In order to reinstate the license, the Department of Revenue can demand you purchase a surety bond so in the event of failing to pay taxes again, they can get their money.

What are the South Carolina Tobacco Surety Bond Amounts?

The following bond amounts are set by the Department of Revenue. This amount is the total any one claim can be against your bond.

The tobacco stamp bond will be 1.1X or 110% of the amount of tobacco stamps you're purchasing.

The minimum is $2,000.

This means if you're only purchasing $1,000 of tobacco stamps, your bond amounts would be $2,000 and not $1,100.

The other tobacco products surety bond will have a custom amount based on the tax liability you failed to pay. The law does not give an exact multiplier but you will be told a precise amount by the Department of Revenue.

How Much Does The South Carolina Tobacco Surety Bond Cost?

Because the bond amount is custom based on your tax liability, the price is going to vary.

Based on our experience with other tobacco tax bonds, you should expect a low fixed price if the amount of your bond is less than $10,000.

In most of these cases, the price is 1% of the bond amount with a minimum price of $100.

If your bond is over $10,000 it's likely you'll need a custom price based on the personal credit of the business owner or owners.

The reason this is the case is because of how surety bonds are underwritten. A surety is the insurance company that underwrites these bonds.

They need a way of assessing the risk of backing your business. Unfortunately the personal credit of the owners is the only viable option.

But this is also your opportunity to save a lot of money.

How You Can Save Hundreds When You Purchase Your South Carolina Tobacco Surety Bond

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.

Every surety company is different in how they assess an applicant. Plus the level of risk they'll tolerate changes over time as well.

This is why different surety companies can quote a rate for a tobacco surety bond that differs by 1%... 2%... even 3 percentages points.

And that's why letting us get you the lowest rate can save you a lot of money.

Let's just look at an example of a $15,000 tobacco tax bond.

So we can easily help you save $150 to $300 or more per year for your surety bond.

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 South Carolina Tobacco Surety Bond Last?

If you're purchasing tobacco stamps on consignment, you must renew your surety bond each year based on the effective date you set when you purchased your bond.

The effective date is your bond's activation date.

Renewing your bond is easy and this is when you'll assess your business and whether your bond amount needs to be increased or decreased based on your needs.

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

If you have the other tobacco products surety bond, this will need to be renewed on a yearly basis for however long you're required to have it active. The Department of Revenue will tell you this length of time.

When you're ready to get your tobacco 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.