Sales Tax Surety Bond

A Sales Tax surety bond is a bond required by many state governments for any business in that jurisdiction that does retail sales, leases and rents goods, or provides other taxable services. It is not a license to purchase goods sales tax free; rather it is a license to collect and remit sales tax to a state or local government. It is typically required by each location of a business within that jurisdiction. It assures that the business will remit the sales taxes due on time as well as serves as proof of financial responsibility and credibility of that business. Because failure to pay the taxes on time can result in a claim these bonds are considered financial guarantee surety bonds. While they are often easier to place than other strict financial guarantee surety bonds, good credit is an essential requirement for surety companies to write sales tax surety bonds. If the credit of the business owners is not up to surety standards, they can be more difficult to place and may require collateral.

These are also known as Sales and Use Tax surety bonds or in California as a BOE Sales Tax surety bond.