What You Should Know About Tobacco Tax Bond
Also known as a Cigarette Tax Bond, the Tobacco Tax Bond is a type of surety bond required of tobacco product sellers and dealers by government licensing bodies. The bond guarantees that the principal will pay taxes to the government and follow the industry rules and regulations. If a business fails to pay the taxes, a claim can be filed against the bond, and if the claim is found to be valid, the surety will pay the amount and collect it from the principal.
Before you buy a bond, you should know the following facts about Tobacco Tax Bonds:
Not every state asks for a tobacco bond
Bond requirements vary from state to state. So, even if you are in the business of manufacturing cigarettes, whether you must buy a bond will depend on the state where you are planning to do business. So, check the state requirements before purchasing a bond.
There is no uniform Tobacco Tax Bond
When it comes to a Tobacco Tax Bond, the rules of the bond change from one state to another. The name of the bond, who has to buy the bond, and the amount of the bond, all can change. For instance, in some states, it is known as Cigarette Tax Bond, while in another state it could be a Tobacco Tax Bond. Some states require you to buy different bonds for different tobacco-related businesses. For instance, some states require separate bonds for cigarettes and other tobacco-related products.
You can buy a bond with a bad credit
If you have bad credit, you can still buy a Tobacco Tax Bond. Many surety companies have special conditions for people or businesses with bad credit. An underwriter will also consider other factors like your past business performance but you may have to pay a higher premium.