What is a Michigan Motor Carrier Fuel Tax Bond?
The Michigan Department of Treasury requires motor carriers to furnish a surety bond before being authorized to conduct business in the State.
The Motor Carrier Fuel Tax Bond is a license requirement for:
- Licensees of motor fuel
- Liquid petroleum gas dealers
- IFTA (International Fuel Tax Agreement) Licensees
- Wholesalers or unclassified acquirers of tobacco products
- Eligible purchasers
A Motor Carrier Fuel Tax Bond guarantees that licensed motor carriers (Principal) will file their tax returns, and make timely fuel tax payments within the required period. If a motor carrier fails to pay their taxes, the Surety will pay the amount on their behalf. The Principal will reimburse the full amount to the Surety that was paid out.
What are the bond conditions?
- The bond must be written by a surety authorized to do business in the State of Michigan.
- The Principal must comply with all laws regarding the distribution of motor fuels, the sale of tobacco products, or licensing of motor carriers.
- The Principal must promptly file accurate reports on forms provided by the Michigan Department of Treasury.
- The Principal must pay all taxes and penalties in full and promptly.
- If the Principal conforms as agreed, the obligation will be void; otherwise, it will remain in full force and effect.
- The Surety has the right to cancel the bond by giving a 60-day written notice to the State of Michigan indicating the cancellation.
What is the bond amount?
The bond amount varies and is decided by the Michigan Department of Treasury.
The cost of the bond is a percentage of the bond amount. It typically ranges between 1% and 5% (it is your bond premium). Your credit score and financial history will impact the cost of your Motor Carrier Fuel Tax Bond.
How do I obtain a Motor Carrier Fuel Tax Bond?
Applying for a bond has never been made easier!
Simply follow these steps:
STEP 1: Apply for the bond
You need to submit a bond application to us. For an accurate cost, get your FREE quote HERE!
STEP 2: Underwriting
We will ask you for a couple of relevant information needed for the bond. This will include your financial history, business performance history, and your credit score. An expert underwriter will take a thorough look at all those.
Note: According to the Department, “all-new licensees and accounts that are currently bonded may be required to submit a surety bond on an annual basis as a condition of maintaining their Motor Fuel Tax License or Eligible Purchaser Agreements. Bond requirements may be subject to an annual review, and your bond amount may change based on the review.”
STEP 3: Bond execution
Once the underwriter is done with the prequalification process, we will immediately issue the bond and send it to you!