What are a Wisconsin Sales and Use Tax Bond?
Any seller, merchant, or dealer and its affiliates selling and distributing tangible goods and products to customers in Wisconsin must collect and pay sales or use tax each year. Before your business can pay sales tax, you must be registered with the Wisconsin Department of Revenue.
Before registering, a business must obtain a surety bond.
The Sales and Use Tax Bond is a type of commercial bond that ensures business owners will pay the required sales and use taxes annually. The bond is put in place to guarantee timely and full payment of all taxes and related fees, costs, interests, and penalties due to the state.
What are the bond conditions?
The BOND FORM is titled “A-133” and covers multiple bond types (not only sales and use taxes) that includes:
- Alcohol beverages
- Tobacco products
- Nonresident entertainers
The bond conditions are as follows:
- The bond must be issued by a Surety authorized to do business in Wisconsin.
- The bonds are required by the Director of Revenue of the State of Wisconsin (Obligee) to guarantee that sales and use taxes will be paid as necessary.
- The bonds are continuous until canceled, where the Surety holds the right to cancel the bond by delivering a written notice to the Department 60 days before the desired date of termination.
- If a Principal (business owner) is delinquent in the payment of the taxes, the Wisconsin Department of Revenue may recover the taxes, interest, and penalties from the Surety upon ten days’ notice.
- Payment up to the total amount of the bond will be paid the claim is validated. The Principal will then have to reimburse the Surety for the total amount paid.
What is the bond amount?
The bond amount is determined by calculating the business’ monthly sales tax figures (gross receipts or a projection of gross receipts).
The cost of the bond (bond premium) is the percentage of the bond amount, which can range from 1%-5%. How much you will need to pay for this bond will be based on several factors, including your creditworthiness and state requirements for the size of the bond and estimates of projected sales taxes for the year.
GET YOUR FREE QUOTE NOW and let us guide you through the surety bond process from start to finish!
How can I obtain a Sales and Use Tax Bond?
SEND US A BOND APPLICATION – We begin the bonding process with an application. You may contact us for your bond application HERE!
UNDERWRITING – Once we have received your application, an underwriter will ask you to submit the following essential requirements for the assessment:
- Your work/business history
- Your credit score
- Your copy of the BOND FORM which can be obtained from the State Department of Revenue
ISSUANCE – As soon as the underwriter has completed the necessary in-depth check, we will immediately issue the surety bond and send it to you!
Consult with a surety expert today at 800-333-7800, and we’ll gladly assist you with your bonding needs!