Sales and Use Tax Bond - Statewide in Florida

Brief Summary

Most Florida dealers never post this bond. F.S. 212.14(4) directs the Department of Revenue to require a cash deposit, bond or other security only where it is necessary to ensure compliance, as a condition of obtaining or retaining a dealer's certificate of registration, and rule 12A-1.060 lists the situations that trigger it: no permanent Florida business location with evidence taxes will not be remitted, operating temporarily for less than six months, a previously revoked certificate, failure to comply with a prior agreement, an unsatisfied warrant, or seeking an additional registration with an outstanding liability of $2,500 or more. If you are in one of those buckets, the amount is calculated from your liability rather than pulled from a table.

Florida does not set a fixed sales and use tax bond. Under F.S. 212.14(4) the Department of Revenue requires a cash deposit, bond or other security in the form and amount it deems appropriate, as a condition of obtaining or retaining a dealer's certificate of registration, where necessary to ensure compliance. Rule 12A-1.060 sets out when security is required and how the amount is computed. A separate bond applies to certain construction contractors under F.S. 212.14(5).

We can help with all Florida bonds!

How to Apply for a Sales and Use Tax Bond:

• Confirm whether the Department has actually demanded security, since it is required only in the circumstances rule 12A-1.060 lists
• Calculate the amount from estimated liability, six months for monthly filers, nine months for quarterly filers, one year for semiannual or annual filers
• For an existing registrant, expect the estimated liability for the preceding twelve months plus outstanding liability
• Use a surety company authorized to do business in Florida, on the Department's suggested surety bond format
• Consider the alternatives, since a cash deposit on Form DR-17A or an irrevocable letter of credit satisfies the same requirement
• For construction contracts, check the 212.14(5) exemption before bonding, since holding a contractor's occupational license for at least 12 months before the contract date removes the registration and bond step
• Consider prepaying the tax on a contract, which the statute allows in lieu of furnishing the contractor bond
• Request release of a bond or letter of credit in writing after twelve consecutive months of compliance
• Use Form DR-29 to apply for release or refund of a cash deposit

Detailed Information About the Florida Sales and Use Tax Bond:

When security gets required

Rule 12A-1.060 lists the triggers. The person owns or manages a business with no permanent Florida business location and there is evidence the person will fail to remit taxes. The business operates temporarily for less than six months. A previous certificate was revoked. The person failed to comply with a prior agreement. There is an unsatisfied warrant. Or the person is seeking an additional registration and has an outstanding liability of $2,500 or more.

How the amount is computed

For a person who already holds a certificate, security equals the total estimated tax or fee liability the Department determines for the preceding twelve calendar months, plus outstanding tax or fee liability.

For a new applicant, the figure depends on filing frequency. Monthly filers, six months of estimated liability. Quarterly filers, nine months. Semiannual or annual filers, one year. The Department may increase the amount based on the value of real property, liquidity of assets, or outstanding judgments, but not beyond total estimated annual liability plus existing debt.

That is the closest thing to a tier table here, and it is driven by your own numbers.

Who counts as the person

F.S. 212.14(4) reaches further than the registered business. It includes entities listed in s. 212.02(12), an individual or entity owning a controlling interest in a business, an individual or entity that acquired an ownership or controlling interest in a business that would otherwise owe security unless the Department determines they are not liable for the taxes described in s. 213.758, and an individual or entity seeking a dealer's certificate for a business at the same location as a previous business that would have owed security, unless they show the business was acquired for consideration in an arms length transaction. Buying a troubled shop's location is one of the fastest ways into this requirement.

The contractor bond, and the twelve month exemption

F.S. 212.14(5) is a separate requirement people miss. A person entering a contract for the repair, alteration, construction or improvement of realty who is required to hold a contractor's occupational license must secure a dealer's certificate of registration before performing, unless that person has held the contractor's occupational license for at least 12 months immediately preceding the date of the contract. As a prerequisite to that certificate, the dealer files a good and valid bond endorsed by a surety authorized in Florida, conditioned that all taxes accruing under the chapter will be paid when due. Any taxpayer may pay the tax in advance on the contract in lieu of furnishing bond. The bond stays in full force during the term of the contract or until the Department issues a formal certificate of clearance stating the tax due on the contract has been paid.

Forms and getting the security back

A cash deposit is posted using Form DR-17A, Certificate of Cash Deposit or Cash Bond. Suggested formats for irrevocable letters of credit and surety bonds are published on the Department's website. After compliance with the tax or fee liability for twelve consecutive months, on written request, the Department releases a surety bond or irrevocable letter of credit. A cash deposit is released or refunded using Form DR-29, Application for Release or Refund of Security.

What happens if you do not post it

A person failing to produce the cash deposit, bond or other security is not entitled to obtain or retain a dealer's certificate of registration, and the Department of Legal Affairs may seek an injunction to stop the business from operating until the security is posted. Security already deposited may be sold by the Department at public sale to recover tax, interest or penalty, with notice to the depositor and any surplus returned.

Eligibility and Requirements for a Florida Sales and Use Tax Bond:

• Security in the form and amount the Department deems appropriate under the particular circumstances
• Surety company authorized to do business in Florida, or an approved cash deposit or irrevocable letter of credit
• Florida Department of Revenue as the party holding the security
• Amount not exceeding total estimated annual liability plus existing debt, even where the Department increases it for property value, asset liquidity or outstanding judgments
• Business name on the bond matching the dealer's certificate of registration exactly
• Financial review of the applicant, since the amount is built from estimated tax liability

Florida Sales and Use Tax Bond FAQs:

Official and Additional Resources for the Florida Sales and Use Tax Bond: