Maryland Other Tobacco Products (OTP) Bond Guide
If you’re selling tobacco products other than cigarettes in Maryland, you’ll need an OTP bond. Learn how the process works in this complete guide.
Bond Overview
- Purpose: To guarantee payment of state tobacco taxes and fees
- Who Needs It: Businesses selling or distributing non-cigarette tobacco products
- Regulating Body: The Comptroller of Maryland, Field Enforcement Bureau, Licensing & Registration Unit
- Required Coverage: $1,000–$100,000
- Premium Rate: Credit-based, starting at 1%
What Is a Maryland Other Tobacco Products (OTP) Bond?
A Maryland OTP bond holds retailers and distributors of tobacco products other than cigarettes liable for paying state taxes and any fines or fees.
The Maryland Comptroller requires this surety bond to guarantee retailers and distributors operate legally. Bond coverage requirements vary by company based on tax liability.
How Much Do OTP Bonds Cost in Maryland?
Your other tobacco products bond premium will vary based on the bond amount you need and the credit score of all owners.
Rates start at 1–1.2% of the coverage amount. For instance, you could pay $100–$120 for a $10,000 OTP bond with excellent credit. Apply for a free, personalized quote now.
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does a Maryland OTP Bond Work?
A Maryland other tobacco products bond creates a legal contract between three parties:
- Principal: The tobacco business filing the bond
- Obligee: The Comptroller of Maryland, Field Enforcement Bureau requiring the bond
- Surety: The provider issuing the bond
As the principal, you are financially responsible for upholding the bond terms. If you break state regulations or fail to remit taxes, the obligee can file a claim for reimbursement up to the bond amount.
How Do I Get My Other Tobacco Products Bond?
We make the OTP bonding process fast and easy. Just follow these steps:
- Verify Coverage: Determine your required bond amount with the Comptroller’s office
- Apply Online: Submit a quote request on this page
- Sign & Pay: Complete the indemnity agreement and pay the online invoice
We’ll mail you the bond documentation via your preferred shipping method. Sign and file it along with your license application or renewal packet.
How Fast Can I Get My Bond?
We issue quotes within one business day or less. Once you purchase, you can select three-day, two-day or overnight FedEx shipping.
Can I Get Bonded With Bad Credit?
Yes, you can typically still get an OTP bond with poor credit. We work with a variety of surety markets to approve 99.9% of all applicants through our Bad Credit Bonding Program.
How Do I Renew My Bond?
Maryland OTP bonds expire annually, unless you select a multi-year term. Extend your bond term by paying your renewal invoice when prompted.
As long as you avoid bond claims and pay your renewal premium, your bond will remain active. However, the surety can cancel the bond by providing 60-days notice to the obligee.
