Motor Fuel Distributor ($10,000) Bond - Houston County, AL in Alabama

Brief Summary

Your Alabama Department of Revenue distributor license and bond do not cover Houston County's own fuel tax. This $10,000 bond is filed with the county, and having it in hand before you start selling or delivering fuel there keeps the county account from becoming the item that holds up your business.

Houston County, Alabama levies its own local tax on gasoline, and the Alabama Department of Revenue's October 2019 rate report lists it at 1 cent per gallon and administered locally rather than by the state. Distributors selling or delivering fuel in the county post this $10,000 bond with Houston County to guarantee payment of the county tax. It is separate from the state distributor bond required under Code of Ala. 40-17-335.

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How to Apply for a Motor Fuel Distributor ($10,000) Bond:

• Call the Houston County Commission to confirm the bond amount, obligee wording and any required county bond form.
• Have the legal business name and address exactly as they will appear on the county fuel tax account.
• Complete the bond application and review the quoted premium.
• Have the bond signed by the surety and its authorized agent.
• File the bond with Houston County before selling or delivering fuel subject to the county tax.
• Keep the separate state distributor bond under Code of Ala. 40-17-335 on file with the Alabama Department of Revenue.

Detailed Information About the Alabama Motor Fuel Distributor ($10,000) Bond:

This is a county bond, not the state bond

The mistake most distributors make is assuming the state license covers everything. Code of Ala. 40-17-335 requires a distributor to file a surety bond with the Alabama Department of Revenue of twice the average monthly tax liability, with a $2,000 minimum, to protect the state against unpaid state motor fuel excise tax. That bond does nothing for Houston County.

The Department of Revenue collects some county fuel taxes on the counties' behalf, and its County Fuel Taxes page lists the counties it administers. Houston County is not among them. The Department's Current Gasoline Tax Rates Report for October 2019 lists Houston County at 1 cent and marks it Non-State Adm., meaning the tax is not administered by the state. A distributor owing Houston County tax deals with the county directly, and the county bond is filed there.

What the bond guarantees

The bond guarantees that the distributor will report and pay the Houston County fuel tax it owes and will follow the county's rules for the tax. If the distributor does not pay, the county can claim against the bond up to its $10,000 penal sum, and the distributor must repay the surety.

Who posts it

A distributor selling, delivering or storing gasoline or motor fuel subject to the Houston County tax posts the bond, with Houston County as obligee.

Confirm before the bond is issued

Before the bond is written, confirm the current amount, the exact obligee wording, any county bond form and the filing steps with the county:

• Houston County Commission, 462 N. Oates St., 6th Floor, Dothan, AL, 334-677-4740
• Houston County Business License office, 334-677-4722

How the premium is set

The surety prices the bond after reviewing the owner's credit, the company's finances and its fuel tax payment history.

Eligibility and Requirements for a Alabama Motor Fuel Distributor ($10,000) Bond:

• Houston County, Alabama named as obligee.
• Bond amount of $10,000.
• Business name on the bond matching the county fuel tax account.
• A surety authorized to write bonds in Alabama.
• A separate state distributor license and bond with the Alabama Department of Revenue.

Alabama Motor Fuel Distributor ($10,000) Bond FAQs:

Official and Additional Resources for the Alabama Motor Fuel Distributor ($10,000) Bond: