Surety Bond Encyclopedia

Fuel Tax Bond - Oregon DOT in Oregon

Brief Summary

Your Oregon fuel tax bond is sized from your own estimated tax, not a flat schedule. Once ODOT sets the figure, we write it on Form 735-1322OR, payable to the State of Oregon, ready to upload in the Oregon Fuels Tax System.

Oregon motor vehicle and aircraft fuel dealers must file a bond with the Oregon Department of Transportation equal to twice their estimated monthly license tax, as ODOT determines it, or $250,000, whichever is less, and never less than $1,000 (ORS 319.050 and 319.053). Use fuel sellers and users bond at twice estimated monthly tax as well. The bond is written on Form 735-1322OR, payable to the State of Oregon, and is a continuing instrument.

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How to Apply for a Fuel Tax Bond:

Register with the Oregon Secretary of State Corporation Division and, if based out of state, appoint an Oregon registered agent.
Register in the Oregon Fuels Tax System and start the license application.
Get the bond amount from ODOT, based on twice your estimated monthly tax.
Have the surety execute Form 735-1322OR, payable to the State of Oregon, with the correct dealer, seller or user box checked.
Upload the bond in the Fuels Tax System under the BND Fuel Tax Bond registration type.
Provide your officer or member list, details of your Oregon fuel activity and supplier information.

Detailed Information About the Oregon Fuel Tax Bond:

The amount depends on your tax, and the cap can move

ORS 319.050 sets the dealer bond at twice the dealer's estimated monthly license tax, as determined by ODOT, or $250,000, whichever is less. Three other sections change that result.

Lower cap of $100,000 (ORS 319.051) for a dealer who held a valid dealer's license on October 23, 1999, has not been required since then to file a bond greater than $100,000, and has performed the requirements of ORS 319.010 to 319.420, including payment of all taxes and penalties.
Higher cap of $1 million (ORS 319.052) if, within 24 months, the dealer files reports late three times, has three dishonored checks or transfers, fails to keep required records, or has a license revoked. ODOT may waive the increase if it finds no intent to avoid the tax, and the dealer may ask for a reduction after 24 months of compliance.
Floor of $1,000 (ORS 319.053) when twice the estimated monthly tax comes to less than $1,000.

ORS 319.050 also lets a dealer ask for a hearing on the necessity or reasonableness of the bond.

Who needs the dealer bond

Under ORS 319.010 a dealer is anyone who imports motor vehicle or aircraft fuel into Oregon for sale, use or distribution, produces, refines, manufactures or compounds it in Oregon, acquires it in Oregon with no license tax previously incurred, or acquires title or possession in Oregon and exports it. ORS 319.030 bars a dealer from selling, using or distributing motor vehicle fuel until it holds a dealer's license, and the bond is filed with the license application.

Use fuel sellers and users

ODOT sets the use fuel seller bond at twice estimated monthly tax but not less than $100, and asks for $1,000 when no reliable data is available (OAR 735-176-0120). The use fuel user bond is also twice estimated monthly tax but not less than $100, and $100 when no reliable data is available (OAR 735-176-0140). ODOT charges no fee for the use fuel user license or emblems.

Bond or deposit

ORS 319.060 allows a deposit of cash or United States, Oregon or Oregon county obligations with the State Treasurer instead of a surety bond. ODOT uses Form 1327a for a deposit in lieu of bond, and that form must be notarized.

Filing the bond

Form 735-1322OR covers dealers, use fuel sellers and use fuel users, is payable to the State of Oregon, and covers all license periods as a continuing instrument. Upload it in the Oregon Fuels Tax System under Account, Registration, Registration Status, using the BND Fuel Tax Bond registration type. If the surety asks to be released, ODOT notifies the dealer, and a dealer who does not file a replacement bond faces cancellation of the license (ORS 319.070).

Eligibility and Requirements for a Oregon Fuel Tax Bond:

A corporate surety authorized to transact business in Oregon (ORS 319.050).
Dealer amount of twice estimated monthly tax or $250,000, whichever is less, and never below $1,000.
Use fuel seller and user amounts of twice estimated monthly tax, not less than $100.
Continuous coverage. The bond is a continuing instrument for all license periods.
Deposit in lieu of bond allowed on Form 1327a, notarized.

Oregon Fuel Tax Bond FAQs:

How does ODOT figure my bond amount?

ODOT estimates your monthly license tax and doubles it. For a motor vehicle or aircraft fuel dealer, the bond is that figure or $250,000, whichever is less, and never less than $1,000 (ORS 319.050 and 319.053).

Can my bond go up to $1 million?

Yes. ORS 319.052 raises the cap to $1 million if, within 24 months, you file reports late three times, have three dishonored checks or transfers, fail to keep required records, or have a license revoked. ODOT may waive the increase if it finds no intent to avoid the tax, and you may ask for a reduction after 24 months of compliance.

We have been licensed since before 1999. Does a lower cap apply?

It can. ORS 319.051 caps the bond at $100,000 for a dealer who held a valid license on October 23, 1999, has not been required since then to file a bond above $100,000, and has met all requirements of ORS 319.010 to 319.420, including payment of taxes and penalties.

Can I post cash instead of a bond?

Yes. ORS 319.060 allows a deposit of cash or United States, Oregon or Oregon county obligations with the State Treasurer. ODOT uses Form 1327a for a deposit in lieu of bond, and it must be notarized.

Do use fuel sellers and users file the same bond?

They use the same Form 735-1322OR, which has boxes for dealer, seller and user. ODOT sets seller and user bonds at twice estimated monthly tax, not less than $100. Without reliable data, ODOT asks for $1,000 from a seller and $100 from a user.