Oregon Cigarette Tax Bond
Cigarette companies are spread across the country and are mandated by the state and federal government to abide by licensing laws. In order for tobacco and cigarette companies to be granted license to operate, they are required to obtain cigarette tax bonds with the State of Oregon Department of Revenue.
What is a Cigarette Tax?
The federal and state government impose a tax on all cigarette products. In the State of Oregon, cigarettes are defined as any tobacco-made product intended for smoking purposes with a non-tobacco wrapper. Cigarette tax covers excise tax, sales tax, value added tax (VAT), and duty tax. In some states, you will need to obtain separate bonds for selling tobacco products and for selling cigarettes, while others require tobacco and cigarettes sellers to obtain only one bond, as is with Oregon State.
For more details, you may read on the Cigarette Tax Overview.
What is the Oregon Cigarette Tax Bond?
Prior to the issuance of license, the State of Oregon requires cigarette and tobacco companies to secure their cigarette bonds with the Department of Revenue before selling cigarettes and other tobacco products. Under the bond, the business agrees to operate complying with local laws and regulations to protect consumers and the general State of Oregon from any damages.
For more information on Oregon’s Cigarette Tax policies, you may visit the office of Department of Revenue or check the online Cigarette and Tobacco Products Tax information.
How does it work?
The Oregon Cigarette Tax Bond must be issued by a surety bond provider certified by the Oregon Department of Insurance. The parties in the agreement are the Principal (permittee), Obligee (State of Oregon Department of Revenue), and Surety/Bond Company or Obligor (surety bond provider or insurance).
The Surety Company will guarantee the compensation (performance bond) of the Obligee should the Principal fail to meet scheduled taxes and fees or violate any other licensing provisions. The Surety Company will receive and assess the validity of all public claims where claims may only amount to the total penal sum arranged in the bond form. The Principal shall reimburse all expenses covered by the Surety Company.
The Bond Company is secured through an indemnity agreement as the permit applicant or licensed business will ensure the full reimbursement of the claims, including legal fees and premiums. This agreement shall be made before the execution of the bond.
How much does it cost?
There is no universal bond amount for all states as the amount is calculated by estimating your yearly tax liability. Depending on the employer’s credit score, industry experience, business history, and the surety provider’s background, the Oregon Cigarette Tax bonds normally cost between 1.5% and 5.0% of the bond amount.
How can I apply for this bond?
At Surety Bond Authority, we are committed to help you get your bond the fast and easy way. Follow our step-by-step procedure to help you get started with your application.
If you want to secure your bond early, make sure to transact with reputable surety carriers. You can APPLY HERE and the surety bond agent will guide you through the process of application until the issuance of your bond.
For the assessment, our underwriter will require the following information:
- Nature of your business
- Credit Score
- Financial strength
For a speedy processing of your bond application, make sure that you have collected and provided accurate information upon submission.
Once the assessment is done, we will promptly issue your bond and send it your way. Contact us today and get your bond issued in no time.