Fuel Tax Bond
Fuel tax bonds are typically required of fuel distributors in certain states. The obligee (person/entity requiring the bond) will be a state-level office. Different states require different bond amounts, so it is important to contact the obligee in the correct department and determine what bond penalty is being required.
Fuel tax bonds generally guarantee that the principal (bond holder) will pay any taxes, fees, or other costs that the laws in the corresponding state require. These bonds bind the principal to pay the amounts that the state decides is correct, which is at the state’s disclosure. Sometimes, fuel tax bonds can also assure the obligee that the principal agrees to furnish any records or documents at any time for the state should they be requested.
Although these bonds are mostly continuous, fuel tax bonds might require continuation certificates in certain states. If this is the case, a certificate will be issued upon receipt of the renewal payment, and it will be mailed to the principal. It is then the principal’s responsibility to make sure that the obligee receives the certificate.Fuel tax bonds typically have a 30-60 day cancellation provision, depending on the preference of the obligee.
