Bond Amount
Determined by the State of California Department of Equalization
Requiring Entity
State of California Board of Equalization
Underwriting Criteria
Personal credit check of all business owners
Premium Rate(s)
2.5% of the bond amount*
Who is Required to Secure this Bond
Every distributor desiring to purchase tax stamps or meter register settings on the deferred payment basis shall request the board to set the maximum amount of such purchases the distributor may have unpaid at any time and the amount of the required security. As mandated by the registration process, the distributor must file a bond with the California State Board of Equalization in an amount equal to no less than 70 percent of the maximum amount, or more that twice the amount, of deferred payment purchases by the distributor may have unpaid at any time as determined by the Board. If the distributor elects to make payments on a twice-monthly basis, the distributor shcall provide to the Board of Equalization a bond in an amount equal to but not less than 50 percent of the maximum amount, or more than twice the amount, of deferred payment purchases the distributor may have unpaid at any time as determined by the Board of Equalization.
Bond Requirement Specifics
The California Cigarette and Tobacco Products Tax Bond is mandated by the State of California Board of Equalization under the Revenue and Taxation Code Sections 30141 and 30143. The bond will be made payable to the State of California and conditioned upon the faithful performance of all the requirements of Revenue and Taxation Code and expressly providing for the payment of all taxes, penalties, and other obligations of the person arising out of this Code shall be held by the board in trust to be used solely in the manner provided in this Code.
Who is protected Under this Bond
Consumers, suppliers and employees of the distributor in the are entitled to make a claim against the surety bond should they act in violation of the Cigarette and Tobacco Products Tax Law. The surety bond guarantees the distributor will operate a business or to exercise a privilege will meet the obligations under that license or permit.
Underwriting Process
The California Cigarette & Tobacco Products Tax Bond is underwritten based on a personal credit check of the business owner(s). In the event the personal credit does not meet the minimum threshold for a standard approval, the premium rate may be elevated and/or the requirement of collateral or a co-signer may be set forth in the approval conditions of the bond.
What you Need to do Once you have your Bond
As the original Cigarette & Tobacco Products Tax Bond must be filed with the State of California, Board of Equalization the original bond will be mailed to the distributor within 24 hours of submitting their application online so long as the first year term premium has been paid and the bond has been approved. The distributor will need to forward the original bond to the State of California, Board of Equalization for filing. The bond will be placed in regular mail unless the applicant opts to pay the fee associated with overnight delivery during the application process.
Obligee Link
www.boe.ca.gov
* Please be advised that the quote you obtain for this bond may include a fee charged and retained by The Bond Exchange.