What is a Texas Sales Tax Bond or Continuous Bond of Seller?

Find out what you need to obtain this bond!

Texas Sales Tax BondIf you are applying for a sales tax permit or registration as a retailer in Texas, the Comptroller of Public Accounts, in pursuant of Chapter 151 of the Texas Tax Code, will obligate you to furnish a surety bond.

The bond will serve as a guarantee that the seller or retailer will fulfill his obligations by paying the necessary taxes on time.

A seller or retailer is someone who:

  • Is in the business of selling taxable tangible items through an auction
  • Is someone categorized by the Comptroller as a seller or retailer (ex. an agent of a dealer under whom the seller operates or from whom he obtains the tangible personal property)
  • Sells more than two taxable items within a 12-month period. This includes sales on behalf of an assignee for the benefit of creditors in bankruptcy.
  • An owner of a hotel or motel that provides telecommunication services to guests
  • Solicits sales of taxable items through various means such as, but not limited to, print advertisement, television, telephone, mail, and other communication systems
  • Is under an agreement with another person in which the latter has entrusted his tangible property; and has authorized the seller or retailer to sell, lease, or have the property rented out.

 

How much is the bond amount?

The bond amount is a case-by-case basis determined by the Comptroller. The Comptroller will base it on the following:

  • The person’s expected amount of tax due
  • All applicable local sales and use taxes, and the necessity in case tax payment failure occurs

The maximum bond amount is $100,000 or four times the amount of the seller’s average monthly tax liability, whichever is greater.

 

What are the Sales Tax Bond conditions?

  • The surety bond should be approved by the Comptroller
  • The approved bond will remain valid until the surety is released
  • The surety bond company must be authorized to do business in the State of Texas
  • The principal will abide by the rules and regulations of the sales tax permit
  • The State of Texas, cities, transit authorities, counties, and special purpose districts are eligible to file a claim against the bond if the principal violates any of the conditions.

 

How do I obtain a Sales Tax Bond?

  • Ask for assistance from a dependable surety bond company that provides competitive fees such as Surety Bond Authority
  • Apply for the Sales Tax Bond
  • Prepare the necessary prequalification requirements. During this process, an underwriter will check your financial history, tax payment history, and credit score among others.
  • Sign an indemnity agreement
  • The surety bond company will complete the Continuous Bond of Seller (Sales Tax) Form 01-752
  • The bond will be sent to you

Do you need further information about this bond? Send us an email! One of our experts will get back to you immediately.

Ready to apply? You may do so here!

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