Tax & Customs
Sales Tax Bond
A bond the state revenue department requires from some businesses before it issues or keeps a sales tax license, guaranteeing the business will pay the sales tax it collects.
- Required by
- State departments of revenue, such as the Alabama Department of Revenue and Florida Department of Revenue
- Bond amount
- Set by whoever requires the bond. We confirm it.
What this bond guarantees
The bond promises the state revenue department (the obligee) that the business will collect and remit sales and use tax. If the business does not pay, the state claims against the bond for the unpaid tax.
Who needs it
- New businesses in certain categories, such as beer, wine, and tobacco retailers in Alabama
- Businesses with past due sales tax
- Businesses reopening a cancelled or revoked sales tax account
What the underwriter looks at
- Expected monthly sales tax
- Tax payment history
- Owner credit
Requirements vary by state and by who asks for the bond. Send us the request you received and we will confirm exactly what it calls for.
Common questions
How long does the Alabama sales tax bond last?
The Alabama Department of Revenue says the bond must stay in force for two years and must be submitted before the sales tax license is approved. The bond's effective date must be within 90 days of the business start date.
When does Florida require a bond?
Florida s. 212.14 lets the Department of Revenue require a cash deposit, bond, or other security when needed to make sure a dealer complies with the sales tax law.