Surety Bond Encyclopedia

Motor Vehicle Fuel Dealer (Fuel Tax) Bond - Statewide in Ohio

Brief Summary

The Ohio statutory minimum is $5,000, but the Tax Commissioner can require a bond equal to three months of your average fuel tax liability. Knowing which number applies before you apply keeps your MF 201 license application from stalling, and a surety bond keeps that money in your business instead of on deposit with the state.

Ohio Revised Code 5735.03 requires every licensed motor fuel dealer to file a surety bond with the Tax Commissioner of not less than $5,000, and the Commissioner may require a bond equal to three months' average tax liability instead. The bond is filed on form MVF 7 with the MF 201 license application, the state of Ohio is the obligee, and a dealer that only sells fuel on which the tax has already been paid may be exempted.

We can help with all Ohio bonds!

How to Apply for a Motor Vehicle Fuel Dealer (Fuel Tax) Bond:

Confirm you meet the motor fuel dealer definition in ORC 5735.01.
Complete form MF 201, Application for License as a Motor Fuel Dealer.
Include a copy of your Ohio Secretary of State certification and a list of any retail service stations you own.
Obtain the surety bond on form MVF 7 in the amount the Tax Commissioner requires, at least $5,000.
Submit the bond with the application to the Ohio Department of Taxation.
After licensing, file monthly returns electronically through the Ohio Business Gateway, whether or not tax is due.

Detailed Information About the Ohio Motor Vehicle Fuel Dealer (Fuel Tax) Bond:

Who needs a motor fuel dealer license

Under Ohio Revised Code 5735.01, a motor fuel dealer is anyone who imports motor fuel into a terminal in Ohio, imports fuel from another state or country in bulk lot vehicles for sale in Ohio, refines motor fuel in Ohio, acquires fuel from a licensed dealer for resale from bulk lot vehicles, or holds a permissive motor fuel dealer license. Section 5735.02 bars any of them from receiving, selling or distributing motor fuel in Ohio without an unrevoked license, and the application must be accompanied by the bond set in section 5735.03.

How the bond amount is set

The floor is $5,000. Section 5735.03 allows the Tax Commissioner to require a bond equal to three months' average tax liability instead, and to raise or lower the bond on any licensed dealer. If the Commissioner finds an increase is necessary to assure payment of the tax, the bond may go to three months' average liability or $50,000, whichever is greater. A dealer moving meaningful gallons should expect the Commissioner to look past the minimum.

Who may be exempt

Section 5735.02 lets the Commissioner exempt a dealer from the bond if the dealer only sells or distributes motor fuel on which the Ohio motor fuel tax has already been paid or is not required to be paid by that dealer. The exemption is discretionary, so it has to be granted, not assumed.

Surety bond or cash

The bond is written on Department of Taxation form MVF 7, Bond of Dealer in Motor Vehicle Fuel, with the state of Ohio as obligee. The Commissioner may accept a cash deposit in lieu of the surety bond, filed on form MVF 6. The MVF 7 makes the surety's liability absolute and unconditional for unpaid fuel tax up to the bond amount.

Cancellation

A surety can be released from liability accruing after 60 days from the date it files a written release request with the Commissioner. If the dealer does not file a replacement bond, the Commissioner may cancel the license.

How premium is set

The surety prices the bond from the bond amount the Commissioner requires, the credit and financial strength of the company and its owners, and the dealer's tax filing history. Larger bonds tied to three months of liability may call for business financial statements.

Eligibility and Requirements for a Ohio Motor Vehicle Fuel Dealer (Fuel Tax) Bond:

Obligee: the state of Ohio, through the Tax Commissioner.
Minimum bond of $5,000, or three months' average tax liability if the Commissioner requires it.
Commissioner may raise the bond to three months' average liability or $50,000, whichever is greater.
Bond written on Department of Taxation form MVF 7 by a surety satisfactory to the Commissioner.
Cash bond on form MVF 6 accepted in lieu of a surety bond at the Commissioner's discretion.
Aviation fuel dealers must also register on form MF 208.

Ohio Motor Vehicle Fuel Dealer (Fuel Tax) Bond FAQs:

How much is the Ohio motor fuel dealer bond?

Not less than $5,000 under ORC 5735.03. The Tax Commissioner may require a bond equal to three months' average tax liability, and may increase it to three months' average liability or $50,000, whichever is greater, when needed to assure payment of the tax.

Can I be exempt from the bond?

Possibly. ORC 5735.02 allows the Commissioner to exempt a dealer that only sells or distributes motor fuel on which the tax has already been paid or is not required to be paid by that dealer. It is a discretionary exemption.

Which form is the bond written on?

Form MVF 7, Bond of Dealer in Motor Vehicle Fuel. A cash bond uses form MVF 6. Both go to the Ohio Department of Taxation with the MF 201 license application.

What happens if my surety cancels?

The surety is released from liability accruing more than 60 days after it files a written release request with the Commissioner. Without a replacement bond, the Commissioner may cancel your license.