A sales tax bond is a bond some states require from sellers. It promises that you will send in the sales tax you collect from customers.
- Who needs it
- Some retailers and wholesalers, by state
- Typical bond amount
- Based on your expected sales tax
- What you pay
- A small percent of the bond amount, based on credit
- Term
- One year, renewable
- A claim protects
- Your state's tax agency
What is a Sales Tax Bond?
A sales tax bond protects your state. When you sell goods, you collect sales tax from buyers. That money belongs to the state. The bond promises you will pay it. If you do not, the state files a claim.
States ask for this bond mostly from new businesses, businesses with a tax history, or certain high-risk types of sellers.
Who needs a Sales Tax Bond?
Retailers, wholesalers, and some service sellers may need one, depending on the state. Many states only ask for it in certain cases, like a new permit or a past late payment.
Your state tax agency will tell you if your sales tax permit needs a bond, and how big it must be.
How does a Sales Tax Bond work?
Here is how it works:
- Your state sets the bond amount, based on the tax you are expected to collect.
- You buy the bond from Junno Surety for a yearly premium.
- You file the bond with your sales tax permit.
- You collect sales tax and send it to the state on time.
- If you do not pay the tax, the state files a claim against the bond.
Pay your sales tax on time and the bond is simply a formality.
How much does a Sales Tax Bond cost?
You pay a small percent of the bond amount, based on your credit. Junno Surety prices at the industry rate minus 5%.
Many small sellers pay only a modest yearly premium. We will quote you fast and free.
What happens if someone files a claim?
A claim happens when you collect sales tax but do not pay it to the state. The state files a claim, the bond pays the unpaid tax up to the bond amount, and then you must pay the bond company back.
How to get your Sales Tax Bond from Junno Surety
Junno Surety can bond sellers in many states. Tell us your state and the bond amount on your tax notice, and we will quote you the same day.
We are a licensed surety bond agency and can often issue your sales tax bond the same day. Start your free quote → or call (762) 499-0237.
Things to know about a Sales Tax Bond
Not every seller needs a sales tax bond. States usually ask for one in specific cases. A brand new business with no track record may be asked to post a bond. So might a business that paid its sales tax late in the past. The bond gives the state comfort that the tax money you collect will reach them. The fix is simple. Collect the right tax, set it aside, and pay it on time. Treat that money as the state's money, because it is. If you do, the bond is just a piece of paper you renew once a year, and your permit stays in good shape.
Frequently asked questions
Why does my state want a sales tax bond?
It guards the tax money you collect from buyers. The state wants to be sure that money reaches them.
Who has to get one?
It varies by state. Often new businesses, or sellers with a late payment history, are asked to post a bond.
How much does it cost?
A small percent of the bond amount, based on your credit. Many sellers pay a modest yearly premium.
Why was I asked for a sales tax bond?
Often because you are a new business, or you had a late tax payment before. The state wants extra assurance the tax money will be paid.
Can the bond requirement go away later?
In many states, yes. After you build a clean payment history, the state may drop the bond requirement at renewal.