Everything You Need to Know About Fuel Tax Bonds: What They Are, How to Obtain Them, and How to Make Sure You're Compliant
1. A Fuel Tax Bond is a type of surety bond that guarantees the payment of taxes on fuel used for motor vehicles.
2. Fuel Tax Bonds are required by the Internal Revenue Service (IRS) in order to obtain a fuel tax license.
3. The bond amount is determined by the IRS, and is based on the type of fuel being sold, the amount of fuel sold, and the location of the business.
4. The bond must be issued by a surety company that is licensed to do business in the state where the business is located.
5. The bond must be renewed annually, and the surety company will typically require a financial statement from the business in order to renew the bond.
6. The surety company may also require additional collateral in order to secure the bond.
7. The bond is typically for a period of three years, and the surety company will charge a premium for the bond.
Some Interesting Statistics about Fuel Tax Bonds
1. Fuel tax bonds are required in all 50 states in the US in order to obtain a license to sell fuel.
2. Fuel tax bonds are typically in the range of $10,000 to $50,000.
3. The bond amount is determined by the state and is based on the estimated amount of fuel taxes that the licensee will collect during the license period.
4. The bond is intended to guarantee that the licensee will remit all collected fuel taxes to the state.
5. The bond is typically in effect for one year and must be renewed annually.
6. The cost of the bond is typically a percentage of the bond amount, ranging from 1-15%.
7. The cost of the bond is usually paid by the licensee, but in some cases it may be split between the licensee and the fuel supplier.
8. The bond is backed by an insurance company and is subject to underwriting.
What is a Fuel Tax Bond?
A fuel tax bond is a specialized type of surety bond that fuel sellers and mixers of fuel (gas, diesel and bio-diesel) must carry in order to get a license. It ensures payment of taxes on fuel (i.e., the gas tax) to the state. The rates for fuel bonds vary widely, which is why we work with many sureties that understand gas and fuel tax users and sellers have.
Fuel Tax Bonds are also known as a International Fuel Tax Bond (IFTA Bonds). These commercial bonds provide insurance against a fuel seller's non-payment of any gas tax.
How does a fuel tax bond work?
A fuel tax bond is a type of surety bond that is required by the government in order to legally operate a business that sells fuel. It is a guarantee that the business will pay all applicable taxes on fuel sales. The bond is a contract between three parties: the business owner (the principal), the government (the obligee), and the surety company (the surety). The principal is the business owner who is required to obtain the fuel tax bond.
What are the benefits of a fuel tax bond?
A fuel tax bond is a type of surety bond that is required by the government in order to ensure that fuel tax is paid in full and on time. The bond is a guarantee that the fuel tax will be paid in full and on time, and it serves as a form of protection for the government in the event that the fuel tax is not paid.
What are the requirements for a fuel tax bond?
A fuel tax bond is a type of surety bond that is required by the government in order to ensure that fuel tax payments are made on time. The bond is a guarantee that the fuel tax will be paid in full and on time, and that any penalties or interest accrued due to late payments will be paid by the bond issuer.
How much does a fuel tax bond cost?
The cost of a fuel tax bond will depend on several factors, including the size of the bond, the state in which the bond is being purchased, and the creditworthiness of the applicant. Generally, fuel tax bonds range in cost from 1-15% of the bond amount. For example, a $10,000 fuel tax bond may cost anywhere from $100 to $1,500.
How do I get a fuel tax bond?
Getting a fuel tax bond is a relatively straightforward process, but it can be a bit complicated depending on the state you are in. Generally, a fuel tax bond is a type of surety bond that is required by the state in order to ensure that fuel taxes are paid in full. The first step in getting a fuel tax bond is to contact a surety bond company. Above are links to each particular jurisdictions fuel tax bonds. Go there and get a bond today!
What is the difference between a fuel tax bond and a fuel tax surety bond?
A fuel tax bond and a fuel tax surety bond are both types of bonds that are used to ensure that a fuel tax is paid to the appropriate government agencies. However, there are some key differences between the two. A fuel tax bond is a type of bond that is issued by the government to guarantee that a fuel tax will be paid.
Can I use a fuel tax bond to get a refund on my fuel taxes?
No, unfortunately you cannot use a fuel tax bond to get a refund on your fuel taxes. A fuel tax bond is a type of surety bond that is required by the government in order to ensure that fuel taxes are paid in full. It is a guarantee that the fuel taxes will be paid in full and on time.
What happens if I don't pay my fuel taxes?
If you fail to pay your fuel taxes, you may face serious consequences. Depending on the jurisdiction, you may be subject to fines, penalties, and even criminal prosecution. At the federal level, the Internal Revenue Service (IRS) is responsible for collecting fuel taxes. If you fail to pay your fuel taxes, the IRS can assess a penalty of up to 25% of the unpaid taxes. Additionally, the IRS may charge interest on the unpaid taxes.
Do I need a fuel tax bond if I am a fuel retailer?
Yes, you do need a fuel tax bond if you are a fuel retailer. A fuel tax bond is a type of surety bond that is required by the Internal Revenue Service (IRS) for any business that sells fuel. The bond is a guarantee that the fuel retailer will pay all applicable federal, state, and local fuel taxes. The bond is designed to protect the government from losses due to non-payment of fuel taxes.
How is a fuel tax bond structured?
A fuel tax bond is a type of surety bond that is required by the government in order to ensure that fuel suppliers, distributors, and retailers comply with applicable laws and regulations. The bond is a financial guarantee that the fuel supplier will pay all taxes, fees, and other charges that are due to the government. The bond is typically structured as a three-party agreement between the fuel supplier, the surety company, and the government.
How does a fuel tax bond work?
A fuel tax bond is a type of surety bond that is required by the government in order to legally operate a business that sells fuel. It is a guarantee that the business will pay all applicable taxes on fuel sales. The bond is a contract between three parties: the business owner (the principal), the government (the obligee), and the surety company (the surety). The principal is the business owner who is required to obtain the fuel tax bond.
How is a fuel tax bond different from a regular bond?
A fuel tax bond is a type of surety bond that is required by the federal government and some state governments in order to ensure that fuel taxes are paid in full. This type of bond is typically required of fuel suppliers, distributors, and wholesalers. It guarantees that the fuel taxes due to the government will be paid in full, even if the supplier or distributor fails to pay them.
Who is responsible for paying the fuel tax bond?
The answer to this question depends on the specific context in which the fuel tax bond is being paid. Generally speaking, the party responsible for paying the fuel tax bond is the party that is required to collect and remit fuel taxes to the government. This could be an individual, a business, or an organization. In most cases, the party responsible for paying the fuel tax bond is the party that is required to collect and remit fuel taxes to the government.
Who is the surety on the fuel tax bond?
The surety on the fuel tax bond is the individual or entity that is legally responsible for ensuring that the principal (the person or business responsible for filing and paying the fuel taxes) complies with all of the requirements of the bond. The surety is usually an insurance company, a bank, or a bonding agency that has been approved by the state in which the fuel taxes are due.
Who is the obligee on the fuel tax bond?
The obligee on a fuel tax bond is the government entity that requires the bond. The obligee is typically the state or federal government, although it may also include a local government, such as a county or municipality. The bond is a guarantee that the bonded party (the principal) will comply with the fuel tax laws and regulations of the obligee.
Who is the principal on the fuel tax bond?
Well, you are. The principal on a fuel tax bond is the entity that is responsible for the repayment of the bond. This entity is typically the issuer of the bond, such as a state or local government. The issuer is responsible for collecting the fuel taxes and using the revenue to make payments on the bond. The bond is typically issued to finance infrastructure projects related to the fuel tax, such as roads, bridges, and other transportation-related projects.
Who Needs a Fuel Tax Bond/Gas Tax Agreement Bond?
All fuel sellers or any entity that mixes different kinds of fuel are typically required to carry this type of commercial bond. Although each state has slightly different laws and regulations, IFTA bonds are required in all 48 continental states and Canada. Fuel sellers purchase the IFTA bond to guarantee the proper payment of taxes for their market. These are commercial bonds for fuel sellers and provide surety bonding for the benefit of the taxing authority.
What do Fuel Tax Bonds Cost?
The cost for a fuel bond varies widely, to be sure. Fuel bonds are considered higher risk bonds, which is why we utilize multiple surety bonding companies to provide these surety bonds. We work extremely hard with fuel sellers to get the lowest possible rate for their IFTA fuel bond.
Some of the reasons that these tax bonds are costlier is that the tax bond itself protects against unethical or illegal acts , or financial distress, by certain fuel sellers. Thus, each seller of fuel works with a bonding company to get a fuel agreement bond to protect the government against any tax losses.
What is the Process to Get Federal Fuel Tax Surety Bonds?
We make it really simple for you. Get a fuel bond form here, or click the button below to get started, or call us at (913) 214-8344 for our official fuel tax bond guide.
Have any questions? Call us at (913) 214-8344, or email at gary(at)swiftbonds.com
What is the International Fuel Tax Agreement?
The International Fuel Tax Agreement (commonly known as IFTA) is a concord among the continental United States and Canada to make the reporting of fuel usage simpler. Motor carriers have to file an IFTA quarterly fuel tax report and are required to have an IFTA bond as well. You can find out more information about IFTA from the International Fuel Tax Association.
A fuel tax surety bond protects the Obligee (the government), which is the party requesting the surety bond, against damages, financial losses, a failure to adhere to local or state regulations or laws, or unethical decisions on the part of the fuel seller(the Principal).
What is IFTA?
The International Fuel Tax Agreement, or IFTA for short, is a treaty between the United States and Canada, which affects all Canadian provinces and the 48 continental United States. IFTA produces a matrix that is supposed to “clarify” how fuel taxes are calculated and paid. Of course, there are so many exceptions that this “clarification” can be terribly difficult in real life.
Here's an example. In 2015, biodiesel in Georgia had some exceptions passed, which are:
1) Jurisdiction provides either a refund or an exemption, impose a tax rate different than diesel, or offer an incentive (i.e. producers' or income tax credit):
2) Jurisdiction offers a refund for tax paid on biodiesel for IFTA carriers:
3) Jurisdiction offers a biodiesel tax exemption for IFTA carriers:
4) Jurisdiction imposes a tax on biodiesel at a rate different than the tax imposed on diesel:
5) Instructions for the IFTA licensees based in your jurisdiction to report biodiesel use on the IFTA return. :
6) Biodiesel incentive such as a producer’s credit or an income tax credit:
7) Website that includes information regarding biodiesel:
So, this is what can create a lot of headaches. Because this gets so tricky, states require that a bond is posted so ensure that taxes are paid.
IFTA Motor Fuel Tax Surety Bond
The IFTA Motor Fuel Tax Surety Bond is used to ensure that you pay all taxes when getting a bond. Each state has some great resources on this. For example, here is Missouri's page on IFTA motor fuel tax surety bonds.
Fuel Tax and Gasoline Tax Bond
For most convenience stores, the fuel tax and gasoline tax bond are required so that you can sell fuel to consumers. The IRS has some good resources on taxable fuel bonds as well.
Motor Fuel Tax Bonds
AP-111 Motor Fuels Tax Continuous Bond – Texas Comptroller
MF-66 International Fuel Tax Agreement (IFTA) Bond
Click here for more on bonds.
