Surety Bond Encyclopedia

Cigarettes Stamping Distributor (Charge) Bond - Statewide in Florida

Brief Summary

When you buy Florida cigarette tax stamps on charge, the bond works as your credit line. Rule 61A-10.0021 caps stamp purchases on credit at the surety amount, so a bond sized too small limits how many stamps you can take before payment is due. A surety bond sized to your busiest month keeps stamps flowing without parking that money in a certificate of deposit.

A Florida wholesale dealer appointed as a stamping agent may buy cigarette tax stamps on credit only after furnishing a surety bond, irrevocable letter of credit, certificate of deposit or unconditional guaranty contract. Under Fla. Stat. 210.05(3)(b) and Rule 61A-10.0021 the amount is 110 percent of the estimated monthly tax liability, never less than $2,000. The bond is filed with the Division of Alcoholic Beverages and Tobacco on Form DBPR ABT-6032 as a Stamping Distributor-Charge bond.

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How to Apply for a Cigarettes Stamping Distributor (Charge) Bond:

Hold a Florida wholesale cigarette dealer (CWD) permit under Fla. Stat. 210.15.
Estimate your highest month of stamp purchases on credit. The bond is 110 percent of that liability, minimum $2,000.
Obtain a letter from manufacturers and importers stating they will ship to you direct.
Write a letter to the division requesting to be a stamping agent.
Sign Form DBPR ABT-6032 with Stamping Distributor-Charge checked and attach the surety agent's certified power of attorney.

Detailed Information About the Florida Cigarettes Stamping Distributor (Charge) Bond:

Charge versus cash

Form DBPR ABT-6032 lists two stamping boxes, Stamping Distributor-Cash and Stamping Distributor-Charge. This page covers the charge bond, the one that lets a stamping agent buy stamps now and pay later. Payment for each month's liability is due on or before the 10th day of the month following the month in which the stamps were sold (Fla. Stat. 210.05(3)(b)).

How the amount is set

The bond equals 110 percent of the estimated monthly tax liability, with a $2,000 minimum. Rule 61A-10.0021 bases the estimate on packs of unstamped cigarettes purchased for resale in Florida for which stamps were bought on credit. The division reviews the surety amount at every audit and bases it on the highest month's total liability. Liability for stamp purchases may not exceed the surety amount, so a busy season can call for a larger bond. The division's bond schedule lists the cigarette distributor amount as $2,000 to unlimited.

Who can become a stamping agent

Fla. Stat. 210.05(3)(a) lets the division appoint dealers and manufacturers as agents and gives any wholesale dealer in the state the right to buy and affix stamps. To be authorized under Rule 61A-10.0021, a wholesale dealer furnishes the surety instrument, a letter from manufacturers and importers stating they will ship to the applicant direct, and a letter requesting to be a stamping agent, plus any required authorization from another state where the dealer is a stamping agent.

Default and cancellation

A default in the bonding and payment provisions can cost the agent its credit privilege, leaving it able to buy stamps only for cash on delivery for up to 12 months. If the surety instrument is cancelled, the stamping agent must cease operation. The surety on Form ABT-6032 may cancel by giving the division sixty days written notice. Payment for stamps must be made by certified check or the bank equivalent, or by electronic funds transfer, not by cash currency.

Eligibility and Requirements for a Florida Cigarettes Stamping Distributor (Charge) Bond:

Solvent surety company qualified to do business in Florida, per Fla. Stat. 210.05(3)(b).
Amount of 110 percent of estimated monthly tax liability, never under $2,000.
Credit stamp purchases capped at the surety amount.
Monthly payment due by the 10th of the following month.
Surety amount reviewed at every audit against the highest month's liability.
Obligee: State of Florida, Division of Alcoholic Beverages and Tobacco.

Florida Cigarettes Stamping Distributor (Charge) Bond FAQs:

Why does the bond limit how many stamps I can buy?

Rule 61A-10.0021 says liability for stamp purchases shall not exceed the surety amount. If you plan to buy more on credit, the bond has to be increased first.

How is the estimated monthly liability calculated?

The rule uses packs of unstamped cigarettes purchased for resale in Florida for which stamps were bought on credit. At each audit the division looks at the highest month's total liability and compares it to your surety.

What is the difference between the charge and cash stamping bonds?

The charge bond backs stamps bought on credit and paid by the 10th of the following month. Form ABT-6032 has a separate Stamping Distributor-Cash box. Ask your ABT auditing district office which box applies to your account before the bond is issued.

What happens if I miss a payment?

Fla. Stat. 210.05(3)(b) allows the division to revoke the privilege of buying stamps except for cash on delivery for up to 12 months after a default in the bonding and payment provisions.

Can I use a letter of credit instead?

Yes. The statute accepts an irrevocable letter of credit or an unconditional guaranty contract, and the rule also accepts a certificate of deposit.