Alabama Motor Fuels Tax Bond Guide
If you are applying for a motor fuel-related business license in Alabama, you’ll need a surety bond. Learn all about how the bond works and the requirements in this guide.
Bond Overview
- Purpose: To guarantee payment of state gasoline taxes
- Who Needs It: Businesses involved with the sale or distribution of motor fuel in Alabama
- Regulating Body: The Department of Revenue (ALDOR), Business & License Tax Division
- Required Coverage: Varies based on tax liability
- Premium Rate: $100 for up to $10k coverage, credit-based for $10k+
What Is an Alabama Motor Fuels Tax Bond?
An Alabama motor fuels or gasoline tax bond guarantees businesses that sell, transport or distribute fuel will pay all taxes owed to the state. It also enforces accurate and timely tax reporting.
Who Needs a Motor Fuels Tax Bond?
Motor fuel exporters, blenders, importers and distributors need a motor fuel tax bond for licensing in Alabama.
The bond amount must be the greater of $2,000 or twice the average monthly tax liability. If you hold multiple licenses, you’ll only need one bond for the license with the highest tax liability.
Gasoline terminal operators, suppliers and permissive suppliers also need a Alabama motor fuels tax bond for twice the average monthly tax liability with a $3M maximum.
How Much Do Motor Fuels Tax Bonds Cost in Alabama?
Your Alabama motor fuels tax bond price will vary based on the bond amount. Some bonds are available for a flat rate of $100, while others require underwriting to determine pricing.
- $1,000–$10,000: $100 flat rate
- $10,001–$50,000: 1–10% of the bond amount, based on credit score
Buy your bond now or apply for a free quote today.
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does an Alabama Fuel Tax Bond Work?
A gasoline or fuel tax surety bond creates a legal contract between three parties:
- Principal: The motor fuel business filing the bond
- Obligee: The ALDOR’s Business & License Tax Division requiring the bond
- Surety: The provider issuing the bond
As the principal, you are financially liable for upholding all bond terms. If you fail to remit proper tax documentation and payments, the ALDOR can file claims on the bond.
The surety will pay valid claims, but you are ultimately responsible for reimbursing all claims paid and associated fees.
How Do I Get a Motor Fuels Tax Bond in Alabama?
You can get your motor fuels tax bond quickly and easily with SuretyBonds.com. Just select your bond amount and enter your information to either purchase online or request a free quote.
You’ll need to provide the county in which your business is located and the type of work you’ll be doing in your application.
How Fast Can I Get My Bond?
For up to $10,000 coverage, you can buy your fuel tax bond online and receive it in minutes.
If you need a larger bond, you’ll receive your quote within one business day. We issue most bonds digitally same-day if you purchase before 4 PM CST.
Can I Get Bonded With Bad Credit?
Yes, motor fuels bonds up to $10,000 coverage require no credit check. For larger bonds, you can likely still qualify for a bond. However, note that poor credit may impact your premium rate.
How Do I Renew My Motor Fuels Tax Bond?
These bonds expire annually. Pay your renewal invoice when prompted to extend your bond term for another year. We’ll do the rest!
