Fuel Tax Bonds

A fuel tax bond is a type of surety bond required by fuel sellers to get licensed. The bond guarantees thatthe fuel tax payments will be met and to protect the state’s interests. If the fuel seller does not pay taxes on selling, trading, mixing, or distributing fuel, the state can file a claim against the bond.

Like all surety bonds, this is a three-part agreement: the surety company (the guarantor),the business or the fuel trader (the principal), and the state (the obligee).

Depending on which state you are applying in, fuel tax bonds can be referred to as something different, to include, mileage & fuel tax bond, fuel supplier bond, motor fuels tax bond, international fuel tax bonds and more.These include bonds for airlines, marines and ground transportation operations.

Who needs a fuel tax bond?

The state you are trying to license your business in will determine whether you need the bond or not. It is usually required from sellers;however, on occasion, distributers, traders, and other traders of fuel may also be required to obtain one.

The type and number of bonds will vary depending on different state regulations. The bond is typically submitted to the Comptroller of Public Accounts of the State Department of Finance.