What is a New Jersey Taxable Fuel Bond?
Get informed about the importance of this surety bond!
You need this surety bond if you conduct a business that involves taxable fuel (gasoline, kerosene, and diesel fuel) such as the following:
- Terminal operator
- Position holder
- Pipeline operator
- Vessel operator
This surety bond is a requirement enforced by the Internal Revenue Service to become registered. The purpose of the surety bond is to ensure that the registrant will promptly pay the necessary taxes due. If the registrant defaults on the tax payment, the Obligee of the surety bond will be able to recover the unpaid tax amount by filing a claim against the surety bond.
The surety bond requirement is in pursuance of Title 26 of the Code of Federal Regulations 48.4081-1.
What is the Taxable Fuel Bond amount?
The bond amount will vary per registrant and will be determined by the Internal Revenue Service Department of the Treasury’s District Director.
The following are the determinants of the bond amount:
- The registrant’s tax history
- The registrant’s expected tax liability for 6 months. The expected tax liability for any person other than a terminal operator that has removed a taxable fuel at a terminal rack is 1 month.
- The registrant’s financial capability
- For gasohol blenders, the bond amount will depend on the following:
- Expected total number of gallons of gasoline at the gasohol production tax rate that will be bought in a 6-month period.
- The difference between the gasoline rate of tax and the applicable gasohol production tax rate.
How can I get a Taxable Fuel Bond?
Here’s how to do get bonded:
- You have to send an application to us. If you are ready to do that now, you may APPLY HERE!
- After we have received your application, we will ask you to submit the necessary information needed for the underwriting process. These are the following:
- Your financial capability
- Your business or job performance history
- Your credit score
An expert underwriter will carefully evaluate all three to attain the best credit decision possible. To avoid any delay, the information that you should submit should be organized and concise.
3.Your surety bond will be issued and sent to you!
What are the surety bond conditions?
- The surety bond should be issued by a surety company that is part of the Department of the Treasury Circular 570
- The Government of the United States of America will be named as the Obligee
- The registrant should obey the provisions of Title 26 of the Code of Federal Regulations, as well as the law of the state on which the registrant operates
- If the registrant commits a valid violation, the aggrieved party will be eligible to file a claim against the surety bond