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Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
When CDTFA asks a use fuel tax permit holder for security, a surety bond lets you meet the demand without handing over cash. CDTFA sets the amount for your account, and the permit is issued only after security is on deposit. A bond keeps that money in your operation while CDTFA holds a guarantee that the use fuel tax will be paid.
California Revenue and Taxation Code 8951 lets the California Department of Tax and Fee Administration require any use fuel user to deposit security in whatever amount it determines, and section 8703 ties issuance of the use fuel tax permit to that deposit. CDTFA policy sets a $2,000 minimum for use fuel tax security with no statutory maximum. A surety bond is one of the accepted forms of security.
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There is no fixed bond amount written into the Use Fuel Tax Law. Section 8951 lets CDTFA require security from any user or vendor whenever it deems it necessary to ensure compliance, in any amount it determines. CDTFA's Compliance Policy and Procedures Manual lists use fuel tax with a $2,000 minimum and no statutory maximum. The figure on your security request from CDTFA is the bond amount you need.
A user is any person who uses fuel subject to use fuel tax to propel a motor vehicle on a California highway. Section 8701 requires every person who wants to become a user of fuel in the state to secure a use fuel tax permit, and section 8703 says the permit is issued after the applicant deposits any security CDTFA requires.
CDTFA does not require registration when the only fuel use involves vehicles licensed under the International Fuel Tax Agreement, out of state vehicles under 26,000 pounds fueled only by vendors, privately operated passenger vehicles or pickups used personally, recreational vehicles, commercial vehicles under 7,000 pounds unladen weight, or two axle trucks rented or leased for 30 days or less. Those exceptions do not apply if the vehicle is fueled from bulk storage, which is the point many fleet operators miss.
CDTFA accepts cash deposits, insured deposit accounts, credit union shares and surety bonds as security. The surety bond must be signed by an attorney in fact or a representative of the bonding company. If the surety cancels, the cancellation takes effect 30 days after CDTFA receives the notice. Confirm the current bond form and filing steps with CDTFA before the bond is issued.
The surety quotes premium on the amount CDTFA sets, after reviewing the owners' credit and the business's tax filing and payment history. Since the bond guarantees tax payments, underwriting weighs the account's reported fuel use and whether returns have been filed and paid on time.
CDTFA sets it for each account under Revenue and Taxation Code 8951. Its internal policy sets a $2,000 minimum for use fuel tax and there is no statutory maximum. Use the amount on the CDTFA request you received.
Not if your only fuel use is in IFTA licensed vehicles. That exception, like the others on CDTFA's list, does not apply if the vehicles are fueled from bulk storage.
Yes. CDTFA accepts cash deposits, insured deposit accounts, credit union shares and surety bonds. Cash and deposit accounts tie up the full amount, while a bond costs only the premium.
The cancellation becomes effective 30 days after CDTFA receives it. Have replacement security in place before that date to keep your permit in good standing.
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