What is a Montana Taxable Fuel Bond?

Understand what this bond is for and how to obtain one!

 

As a condition of the taxable fuel registration, applicants are obligated to post a surety bond - as part of a security test - issued by a reputable surety bond company such as Surety Bond Authority.

 

This requirement is mandated by the Internal Revenue Service, pursuant to Section 48.4101-1 of the Code of Federal Regulations.

 

Its purpose is to ensure that those who are in the excise tax-related businesses - buying, selling, and producing taxable fuel such as gasoline, diesel fuel, and kerosene - will pay the right amount of taxes that they owe the government on time.

 

What is the bond amount?

The bond amount varies. It will be determined by the district director based on several factors such as:

  • The person’s tax history
  • The person’s significant risk in a late payment or nonpayment of taxes
  • The person’s financial capabilities and other expected liabilities.

The bond’s premium varies as well. Those who have excellent credit scores may be eligible for a low bond premium! Know what yours by getting your FREE quote here!

 

What are the bond conditions?

  • The bond must be in the form prescribed by the district director
  • The bond must be a public debt obligation of the United States Government
  • The obligation of the bond’s principal is unconditionally guaranteed by the United States Government
  • The surety bond company who will issue the bond should be part of the Department of the Treasury Circular 570 list of accepted sureties such as Surety Bond Authority
  • In case of bond cancellation, the district director requires a 60-day notice

 

How can I obtain a Taxable Fuel bond?

First, you need to submit an application for this type of bond. If you are ready to do that now, you may easily apply here!

 

Once the application is received, one of our expert surety bond agents will guide you through the whole process from the time you applied until you submit the surety bond. We will make sure that you understand all the conditions before the bond is issued.

 

An underwriter will then evaluate the following:

  • Your financial capability
  • Your job/business performance history
  • Your tax payment history
  • Your credit score

Once the pre-qualification process is fulfilled, we will execute the bond and send it to you!

 

What else are the requirements for a Taxable Fuel registration?

 

You must complete IRS Form 637. This is a blanket form for different excise tax activities including taxable fuel.

 

The IRS will perform a registration test on the applicant. This will include an Activity Test, Acceptable Risk Test, and Satisfactory Tax History Test.

 

Need the bond as soon as possible? Contact us today!