California Tobacco Manufacturer and Importer Bond
Know why this bond is needed and how to get one fast!
What is a California Tobacco Manufacturer and Importer Bond?
The California State Board of Equalization requires newly qualified and elevated-risk nonparticipating manufacturers to file with the Attorney General this surety bond.
The said elevated-risk nonparticipating manufacturers are those who are seeking certification from the Attorney General. If the Attorney General believes that the said persons poses an elevated risk for noncompliance, a bond will be required.
The purpose of this bond is to ensure that the manufacturer will perform the following duties:
- Comply with all obligations stated in California Revenue and Taxation Code §30165 and Article 3 and Chapter 1 of Part 3 of Division 103 of the Health and Safety Code.
- Pay all state taxes for the sale or distribution of cigarettes and tobacco products within the State of California during the year in which the certification is filed and the next succeeding calendar year.
- Indemnify any person who will be harmed by the misconduct of the manufacturer.
How much does a California Tobacco Manufacturer and Importer Bond?
The bond premium will start at 1% of the bond amount for those who have excellent credit scores.
The bond amount varies per manufacturer. This will be determined by the California State Board of Equalization.
The minimum bond amount is $50,000 or the amount of escrow the manufacturer in was required to deposit as a result of the largest of its most recent 5 calendar year's sales in California.
If you have determined your bond amount, you may check you bond premium by getting your FREE QUOTE HERE from us!
How can I get a California Tobacco Manufacturer and Importer Bond?
STEP 1: Apply for this bond
If you’re ready to apply now, you may do so HERE!
STEP 2: Underwriting
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 Tobacco Manufacturer and Importer Bond work?
A surety bond is a three-party agreement.
- Principal – Tobacco manufacturer or importer
- Obligee – State of California
- Surety – Surety bond provider
This bond is for the protection of the Obligee in case the Principal violates any of his or her contractual obligations required by California Revenue and Taxation Code §30165 and Article 3 and Chapter 1 of Part 3 of Division 103 of the Health and Safety Code. If the Principal fails to do any of the bonded obligations, the Obligee can file a bond claim. The Surety will first investigate if the claim is valid before paying the Obligee. If it, the Surety will settle the claim. The Principal must then reimburse the Surety for the payments made.
