Arkansas Motor Fuel Tax Bond Guide
Distributors and suppliers of special motor fuel in Arkansas typically need a surety bond to receive a state license. Learn how the bond works, pricing information, and more in this guide.
Bond Overview
- Purpose: To protect the state if a fuel seller or distributor breaks tax regulations
- Who Needs It:
- Regulating Body: The Arkansas Motor Fuel Tax Section
- Required Coverage: $1,000+ based on tax liability
- Premium Rate: $100 flat rate for up to $10k coverage
What Is a Arkansas Motor Fuel Tax Bond?
An Arkansas motor fuel tax bond ensures that excise fuel tax licenseholders will pay all taxes, penalties, and interest owed and operate according to state law.
The bond protects the state if a fuel seller, mixer or distributor does not comply with industry and tax regulations.
Alabama Fuel Tax Bond Coverage Requirements
Your required bond coverage will vary depending on your motor fuel license type and monthly tax liability.
- Suppliers, permissive suppliers, and terminal operators need a fuel tax bond for twice the average monthly tax liability with a $3,000,000 maximum.
- Exporters, blenders, importers, and distributors need a surety bond for twice the average monthly tax liability with a $2,000 minimum.
- Motor fuel transporters and aviation fuel purchasers have no bond requirement.
Any vehicles owned by and exclusively used for business of the United States Government are tax exempt.
What if I have multiple licenses?
If you have multiple excise fuel licenses, you only need to file one surety bond for the license type with the highest average monthly tax liability.
How Much Do Motor Fuel Tax Bonds Cost in Arkansas?
Excise motor fuel tax bonds in Arkansas cost a flat rate of $100 for up to $10,000 bond coverage. Fuel tax bonds over $10,000 will cost 1–10% based on personal credit score.
Click below to start your purchase or request a free quote.
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does a Arkansas Motor Fuel Tax Bond Work?
A fuel tax bond is an agreement between three parties:
- Principal: The motor fuel excise tax licensee
- Obligee: The Arkansas Motor Fuel Tax Section
- Surety: The issuing surety provider
As the principal, you promise the obligee that you will uphold Ark. Code Ann. Section 26-55-101 and 26-56-101 and compensate for any damages.
How Do I Get a Motor Fuel Tax Bond in Arkansas?
To get bonded as a motor fuel distributor or seller in Arkansas, complete the quick form on this page. Prepare to submit the following information:
- Motor Number, if you previously held a motor fuel tax license
- FEIN or SSN
- Account type(s) to be covered
Depending on your bond coverage needs, you’ll either purchase your bond online or request a quote. You can checkout at your convenience through our secure online portal. Then, sign and file the original bond form with the Motor Fuel Tax Section.
If you need a federal Taxable Fuel Bond (Form 928) required by the IRS, please visit our Taxable Fuel Bond Guide page instead.
How Fast Can I Get My Bond?
If your bond amount is $10,000 or less, you can purchase your bond online in minutes. With larger bonds, you’ll typically receive your quote invoice within a few hours on business days.
The state requires you to file the original bond form, so we’ll mail you the bond via FedEx. You can select overnight, two-day, or three-day shipping.
How Do Fuel Tax Bond Claims Work?
The financial penalty for failing to pay fuel taxes or not complying with state provisions is a fine of $100–$1,000, based on the violation. If you are convicted of falsely reporting taxes to avoid payments, fines are greater at $200–$2,000.
Under the surety bond, the state can file claims to collect payment for penalties, fines, and fees owed. The surety will validate and pay claims, then seek repayment from you, the bonded principal. This makes it very important for special fuel sellers to operate honestly and ethically.
Can I Get Bonded With Bad Credit?
Yes, bonds up to $10,000 require no credit check. If you need a larger bond, you may still be able to get bonded with lower credit. However, expect higher rates due to the increased financial risk for the surety.
How Do I Renew My Motor Fuel Tax Bond?
These bonds expire after one year. However, you can extend the bond term indefinitely by simply paying your renewal invoice when prompted.
A SuretyBonds.com representative will contact you starting 90 days before the expiration date. If you need any changes to your bond amount or information, please share those details.
