What is a New York Taxable Fuel Bond?

See why this surety bond matters to your business!

New York Taxable Fuel BondEvery enterer, refiner, blender, terminal operator, position holder, pipeline operator, and vessel operator must procure a surety bond before engaging in the business that involves the following taxable fuel:

  • Gasoline
  • Kerosene
  • Diesel fuel

 The Internal Revenue Service requires this surety bond in order to ensure that the registered enterer, refiner, blender, terminal operator, position holder, a pipeline operator, and vessel operator will pay the necessary taxes on time and in full.

In the event that the registrant defaults on the tax payment, the Obligee of the surety bond will be able to recover the amount due through 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?

We have made the surety bond procedure easier for you! Just follow these simple steps:

STEP 1: You must first apply for this type of surety bond. If you are ready to do that now, you may APPLY HERE!

Once we have received your application, we will immediately start the bonding process. We will inform you about the important documents that you need to submit for the next step, which is the underwriting process.

STEP 2: An underwriter will take a thorough look at the following:

  • Your financial strength
  • Your job performance history
  • Your credit score

STEP 3: After the underwriting process has been fulfilled, we will issue your surety bond and send it to you immediately!

 

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 surety bond should be made payable to the Government of the United States of America
  • 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

Do you need further assistance? Call us now at 800-333-7800!

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