What is a Texas Motor Fuel Continuous Tax Bond?
Know what this bond is for and who can obtain it!
The Texas Motor Fuel Continuous Tax Bond is a conditional surety bond that is needed for the issuance of a Fuels Tax License.
The Comptroller may or may not require the bond above to any person who conducts one or more of the following activities that involve gasoline; gasoline blended fuel, liquefied natural gas, diesel fuel, and compressed natural gas:
- Supplier – handles motor fuel transactions in bulk transfer/terminal system and receives motor fuel in Texas under a two-party exchange
- Permissive Supplier – a position holder of motor fuel that is located outside of Texas, but delivers motor fuel within the state
- Aviation Fuel Dealer – controls an aircraft servicing facility that delivers gasoline or diesel fuel to aircraft
- Distributor – buys motor fuel from a supplier or permissive supplier and sells it on a wholesale or retail basis.
- Terminal Operator – a person who controls a terminal
- Importer – a person who imports motor fuel into Texas
- Exporter – A person who exports motor fuel from Texas
- Motor Fuel Transporter – transports gasoline, gasoline blended fuel, and diesel fuel outside the bulk transfer/terminal system
- Blender – produces blended motor fuel outside the bulk transfer/terminal system
- Compressed Natural Gas/Liquefied Natural Gas Dealer – supplier of CNG and LNG to motor vehicles
- Interstate Trucker – motor vehicle (two axles, three axles, or has a gross weight greater than 26,000 pounds) operator in Mexico and Texas for commercial use.
- Dyed Diesel Fuel Bonded User – buys dyed diesel fuel for non-highway use
Who and what is the bond for?
The bond can be imposed by the Comptroller on a licensed holder who either:
- Failed to file returns or remit tax on time
- An IFTA licensee who has been discovered to have caused problems and that may pose a risk to member jurisdictions’ interests
The bond’s purpose is to ensure on-time payment of necessary taxes and strict compliance of the licensee with the provisions of the Texas Tax Code.
What is the bond amount?
| BOND AMOUNT |
CONDITIONS
|
|
|
Gasoline |
$30,000-600,000 |
The amount should be equal to two times the maximum amount of tax that could accrue on tax-free gasoline purchased or acquired during a reporting period. |
|
Diesel |
$30,000-600,000 |
The amount should be equal to two times the maximum amount of tax that could accrue on tax-free diesel fuel purchased or acquired or sold during a reporting period. |
| Compressed Natural Gas (CNG)/Liquefied
Natural Gas (LNG) |
$30,000-600,000 |
The amount should be equal to two times the maximum amount of tax that could accrue on CNG or LNG produced, purchased, acquired, sold, or delivered during a reporting period. |
|
Dyed Diesel Fuel Bonded User |
$10,000-$600,000 |
The amount should be equal to two times the maximum amount of tax that could accrue on tax-free diesel fuel purchased or acquired during a reporting period. |
How can I obtain this bond?
By seeking the help of a surety bond company such as Surety Bond Authority. We can guide you through the whole bonding process with ease.