California Motor Vehicle Fuel Broker Bond
Know why this bond matters and how to obtain one!
What is a California Motor Vehicle Fuel Broker Bond?
To ensure that the motor vehicle fuel broker will promptly pay the necessary taxes due once licensed, the California State Board of Equalization – in pursuant to Section 7486 of the California Revenue and Taxation Code – requires the said person to procure this bond.
If the licensed motor vehicle fuel broker defaults on the payment of monies required by the Motor Vehicle Fuel License Tax Law, the person who will be harmed by the violation will be able to recover the amount due through a bond claim.
Under the conditions of the bond, the motor vehicle fuel broker is obligated to comply with the provisions of Part 2 of Division 2 of the Revenue and Taxation Code and Chapter 2 of Title 14 of Part 2 of the Code of Civil Procedure as well.
How much does a California Motor Vehicle Fuel Broker Bond cost?
Motor vehicle fuel brokers who have excellent credit scores will be eligible to pay as low as 1.5% of the bond amount.
For those who have low credit scores, the maximum bond premium is 5% of the bond amount.
The bond amount will be determined by the California State Board of Equalization. It will be equal to 3 times the estimated average monthly tax liability of the license applicant.
Want to know what your bond premium is? Get your FREE SURETY BOND QUOTE HERE!
How can I get a California Motor Vehicle Fuel Broker Bond?
STEP 1: You must first apply for this bond. If you’re ready to apply now, you may do so HERE!
STEP 2: Assessment or Prequalification Process
We’ll ask you a few important information about your financial history, business performance history, and your credit score. An underwriter will carefully evaluate all these.
STEP 3: Bond execution
Once the underwriter is done with the prequalification process, you’ll be asked to sign the indemnity agreement. After that, the bond will immediately be issued and sent to you!
How does a California Motor Vehicle Fuel Broker Bond work?
This bond has 3 parties:
Principal – Motor Vehicle Fuel Broker
Obligee – State of California
Surety – surety bond provider
No action will be taken against this bond as long as the Principal fulfills his or her duties in compliance with the relevant laws of the State and the conditions of the license.
The role of the Surety is to provide financial assistance to the Principal if a claim is made. The Surety will first investigate the validity of the claim. The Surety will check if the claim is covered by the bond as well. If it is, the Surety will pay the Obligee on behalf of the Principal. This payment must be reimbursed by the Principal as soon as the claim has been settled.
Ready to apply for your surety bond? START HERE!