Apply for Fuel Tax Bond

published on: 06 July 2017 last updated on: 28 November 2024
Fuel Tax

We all have come across the term Fuel Tax, but not many would be knowing what is a Fuel Tax Bond? Developed especially for the fuel selling segment in the USA, a fuel tax bond acts as a guarantee for the payment of necessary fuel tax by a seller and is insurance for any failure to do so. Getting this surety bond arranged is an important procedure for sellers to get a license. The obligee of the bond is the state and public, to whom the tax is due while the business owner is the principal in the relationship. In case a seller fails to pay the fuel taxes, the obligee can file a claim against the bond to receive the due compensation.

Fuel tax bonds are also called International Fuel Tax Bonds (IFTA). Other names include mileage and fuel tax bond, fuel supplier bond, motor fuels tax bond, or fuel distributor tax bond.

Who needs Fuel Tax Bonds?

If you are selling or mixing fuel, you need a fuel tax bond. Simply put, anyone who imports, exports, supplies, deals with, or blends fuel (gasoline) will have to get a fuel tax bond to legitimately continue the business.

These bonds are a requirement in all the 48 continental states with certain differences at state level. It is always prudent to check your state regulations so you purchase only what you require. The fuel tax bond needs to be submitted to the concerned local governing body appointed by the state, which could be the Public Accounts Comptroller, Finance Department, Revenue Department or related offices.

Conditions and Costs

An application for a fuel tax bond is subject to intense review of the seller’s financial and business status, including past history and current stability. The underwriter’s job is to identify low-risk sellers to approve a bond, so anything that might suggest the contrary will be a detrimental factor for the applicant’s chances of getting the bond approved.

Fuel tax bonds are high risk bonds, hence the stringent underwriting procedure. The bond amounts are high and usually set by the state. In some regions, the bond amount is determined according to the seller’s tax liability that is calculated over a certain time period. You can obtain your bond at a particular rate which is a percentage of the bond amount. Sellers with good credit history will enjoy a good evaluation and their cost would amount to a lesser percentage, compared to those with average or bad credit history (perceived as riskier by underwriters). Determine your fuel tax bond expenditure with some informed quotations.

Find the Right Bond Provider

There are many surety bonds across the country offering different rates for fuel tax bonds. Your best bet would be to align or take the help of an aggregator to scour the bond landscape for the right providers and quotes. Get low quotations on your fuel tax bond and speak to experts who will address your queries and doubts.

Major fuel tax bond providers have the expertise of dealing with multiple scenarios and years of good relationships with underwriters. They can help sellers browse through a range of options. Save more with expert help.

Read also: Personal Loans: How Are They Different from the Others?

FinanceTeam

Mashum Mollah is the feature writer of Search Engine Magazine and an SEO Analyst at Real Wealth Business. Over the last 3 years, He has successfully developed and implemented online marketing, SEO, and conversion campaigns for 50+ businesses of all sizes. He is the co-founder of Social Media Magazine.

Leave a comment

Your email address will not be published. Required fields are marked *