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Taxable Fuel Bond

How much does a taxable fuel bond cost?

Taxable fuel registrants are required to post a surety bond guaranteeing the payment of taxes in order to be in compliance with guidelines established by the Internal Revenue Service. The amount of these bonds is not preset by the IRS and is instead dependent upon the applicant’s financial capability, tax history, and expected liability pursuant to sections 4041(a)(1) and 4081 of the Federal Tax Regulations. However, applicants should be aware that the amount of their bond will never be greater than an amount equal to the following:

  • Expected tax liability for a representative 6-month period
  • Expected tax liability of someone other than the terminal operator during a representative 1-month period (specific to terminal operators)
  • The gasohol bond amount (specific to gasohol blenders)

Because the bond amount is specific to every applicant, it will always be subject to underwriting in order for the surety company who backs the bond to determine the amount of risk present by writing the bond. Along with submitting to a credit check, applicants may be asked for additional information, such as business financials and personal financials for all owners of the business. Therefore it is best to have these documents prepared prior to submitting an application for a taxable fuel bond. Applicants with exceptional credit may find themselves approved for as little as 2% of the total bond amount for the year.

Looking for a free quote for your taxable fuel bond? Call 1 (800) 308-4358 or submit a short online bond request form and one of our surety specialists will contact you to assist with any of your bonding needs.

Why do I need this bond?

As stated before, registrants must obtain these bonds in order to guarantee the payment of all taxes owed to the United States government by a date to be determined in advance (26 U.S. Code 6151). Failure to pay all taxes owed on time may result in a claim against the bond in order to recoup all unpaid taxes. Should the surety be forced to pay any money to settle the claim, it is the responsibility of the principal (registrant) to reimburse them for that money.

Have any questions concerning your taxable fuel bond? Talk to a surety specialist today by calling 1 (800) 308-4358 or complete our bond request form online and an expert will contact you immediately.

What’s the fine print?

Since taxable fuel bonds are required by a federal agency, the surety company that writes the bond must be on the Department of Treasury Circular 570 list of approved surety companies. Once the bond has been issued, it shall remain in full effect and will be renewed annually for as long as the registrant wishes to continue operations. However, the surety company may cancel the bond at any point during the term by providing the Chief, Excise Tax Program of the Internal Revenue Service with written notice at least 60 days prior to the proposed cancellation date.

How do I apply for my taxable fuel bond?

SuretyBonds.com strives to provide every client with a fast, easy and accurate surety bond application process.

  • Step 1: Apply online, and let our surety experts do all the work for you.
  • Step 2: Pay for your bond. We offer quick, easy and convenient payment options.
  • Step 3: Receive your bond. We will instantly send you a digital copy of your bond via email and send your original in the mail. The original bond must then be filed with the obligee.

What are you waiting for? Fill out our online bond request form now to receive a no-obligation quote!

Understand surety bonds

Surety bonds hold business professionals responsible for acting ethically and lawfully while on the job. When it comes to taxable fuel bonds, the obligee requiring the bond is the Chief, Excise Tax Program, the principal required to purchase the bond is the registrant and the surety responsible for producing the bond is the underwriting company.

Want to learn more about what surety bonds are and how they protect consumers? Click here.

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Additional Resources

Application for Registration (Form 637)

Excise Tax Information

26 CFR 48.4101-1 - Taxable fuel; registration

26 CFR 48.4101-1 - Taxable fuel; definitions

26 U.S. Code 6151 - Time and place for paying tax shown on returns

Department of Treasury Circular 570 list of approved surety companies

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