Cigarette Stamp Tax ($25,000) Bond - Statewide in Oklahoma

Brief Summary

Oklahoma sets this bond at a flat $25,000 by statute, so there is no tier to calculate. A surety bond on the Tax Commission's approved form satisfies 68 O.S. Section 320 without leaving $25,000 in cash or a certificate of deposit with the state.

Cigarette wholesalers, jobbers and distributing agents in Oklahoma must file a $25,000 bond with the Oklahoma Tax Commission when they apply for a license, under 68 O.S. Section 320. The bond is payable to the State of Oklahoma and conditioned on compliance with the cigarette tax article and the Commission's rules, including the duty to affix tax stamps before cigarettes are sold.

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How to Apply for a Cigarette Stamp Tax ($25,000) Bond:

• Confirm the license type you are applying for: wholesaler, jobber or distributing agent.
• Have the legal business name exactly as it appears on your Oklahoma Tax Commission registration.
• Complete the bond application and the owner credit review.
• Get the bond executed on the Oklahoma Tax Commission approved form for $25,000, payable to the State of Oklahoma.
• File the bond with the Oklahoma Tax Commission with the license application and the annual license fee.
• File monthly wholesale cigarette reports by the 20th of the following month.

Detailed Information About the Oklahoma Cigarette Stamp Tax ($25,000) Bond:

Who posts it

68 O.S. Section 320 requires a $25,000 surety, collateral or cash bond from every applicant for a distributing agent license and from every applicant for a wholesaler or jobber license. For wholesalers and jobbers the bond is payable to the State of Oklahoma and conditioned upon compliance with the cigarette tax article and the rules of the Oklahoma Tax Commission. The Commission's Cigarette and Tobacco Supplement (Packet C) puts it plainly: all wholesalers and distributing agents are required to post surety of $25,000.

Wholesalers carry the stamping duty. Under 68 O.S. Section 305, a licensed wholesaler must affix the required stamps upon withdrawal from storage and before any sale or distribution of cigarettes in the state.

One bond covers multiple licenses

If you need more than one license under the cigarette article, Section 320(D) has you file a bond for the license that requires the greatest amount rather than a separate bond for each.

Forms of security

Packet C accepts cash, a surety bond, a certificate of deposit, a certificate of savings, U.S. Treasury bonds or other securities the Commission finds acceptable. Surety bonds must be on OTC approved forms. A certificate of deposit must be titled in both names joined by the word or, for example Taxpayer or the Oklahoma Tax Commission.

Release and cancellation

A surety can ask in writing to be released. It is released from liability after a 60 day period, but the release does not affect liability that accrued before that period ended. The Commission notifies the licensee, and if a new bond is not filed within the 60 days the Commission cancels the license. A licensee that has complied continuously for the previous three consecutive years may ask for its bond or security back, and the Commission may refuse if returning it would put state revenue at risk.

Fees and reporting

Under 68 O.S. Section 304, wholesalers pay an annual license fee of $250 and distributing agents pay an annual fee of $100. Packet C lists the wholesaler fee as $250 per location and requires wholesale cigarette reports on or before the 20th of the month following the reporting period.

Tobacco products are separate

Wholesalers who handle untaxed tobacco products under Article 4 face a separate $25,000 bond requirement in 68 O.S. Section 412. If you deal in both cigarettes and other tobacco products, ask the Oklahoma Tax Commission which bond form it wants on file before the bond is issued.

Eligibility and Requirements for a Oklahoma Cigarette Stamp Tax ($25,000) Bond:

• Bond amount of exactly $25,000 under 68 O.S. Section 320.
• State of Oklahoma as obligee, filed with the Oklahoma Tax Commission.
• Bond written on an OTC approved surety bond form.
• One bond sized to the license with the greatest requirement when you hold more than one license.
• Bond kept in force for as long as the license is held. A released bond must be replaced within 60 days or the license is cancelled.

Oklahoma Cigarette Stamp Tax ($25,000) Bond FAQs:

Official and Additional Resources for the Oklahoma Cigarette Stamp Tax ($25,000) Bond: