What is a Wisconsin Cigarette or Tobacco Products Tax Bond?
The Cigarette or Tobacco Products Tax Bond, also known as A-133 surety bond (which also covers alcoholic beverages, fuel, and sales and use, and non-resident entertainers), is required by the Wisconsin Department of Revenue for businesses engaged in the manufacture, warehousing, sale and distribution of cigarettes, tobacco products, and other tobacco-infused products.
The bond ensures that the business is duly licensed and authorized to transact business in the State of Wisconsin. It also guarantees payment of all applicable taxes as mandated by state laws.
This is a Federal Bond required for cigarette and tobacco vendors in all states by the Alcohol and Tobacco Tax and Trade Bureau.
Why do you need a Cigarette or Tobacco Products Bond?
The bond’s purpose is to protect government entities and the general public from non-payment of sales tax on tobacco and cigarette sales. If a cigarette or tobacco product vendor fails to pay their sales tax obligations promptly, they can face a claim on their bond.
For validated claims, the surety pays relevant authorities up to the penal sum of the bond. The vendor then will repay the surety to cover these costs fully.
What are the bond conditions?
- The condition of this bond is such that the Principal has applied for, or has obtained, a permit to engage in business subject to taxes according to the provisions of Chapters 66, 71, 77, 78, or 139, of the Wisconsin Statutes and any amendments to that and demand has been made upon the Principal by the Wisconsin Department of Revenue for security for payment of taxes imposed under those chapters.
- The Principal must fully comply with all of the provisions of the Wisconsin Statutes as indicated above, and pay all taxes, interests, and penalties promptly when due.
- If the Principal defaults on the payment of the taxes indicated under the Wisconsin Statutes indicated above, the State Department of Revenue might recover the taxes, interest, and penalties from the Surety upon ten days’ notice.
- The Surety has the right to cancel the bond except for any liability already gained or accumulated and may provide a Letter of Notice to the Wisconsin Department of Revenue within 60 days.
What is the bond amount?
The bond amount may vary depending on the Obligee’s amount requirements and your annual sales tax liability.
The cost of the bond is a percentage of your bond amount, which can range from 1%-5%. The cost that you have to pay to get bonded is based on the surety’s evaluation of your financial credentials (personal and business). If you have a strong financial record, you are likely to pay out a lower percentage of the bond cost.
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How can I obtain a Cigarette or Tobacco Products Tax Bond?
Find a reputable Surety Bond Company that is authorized to issue bonds in your state.
Then, follow these easy steps:
STEP 1: Apply for the bond
You will have to submit a completed bond application for a surety underwriter to assess your personal and financial standing.
STEP 2: Underwriting
We will ask you for a couple of relevant information required for the bond. This will include your financial history, business performance history, tax payment history, and your credit score. An underwriter will carefully evaluate all those.
STEP 3: Bond execution
Once the underwriter is done with the underwriting process, we will immediately issue the bond and send it to you!
Do you need a Cigarette or Tobacco Products Tax Bond immediately? Let our experts help you now! Contact us now!