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Expert Surety Bonds Since 2004
Need assistance? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Expert Surety Bonds Since 2004
A dyed diesel fuel bonded user does not start at the $30,000 floor that suppliers and distributors face. Texas sets its minimum at $10,000. Either way the bond is sized to your tax-free gallons, and a surety bond keeps that money working in the business.
Texas Tax Code Section 162.212 lets the Comptroller of Public Accounts require a bond from diesel fuel suppliers, permissive suppliers, distributors, exporters, importers, blenders and dyed diesel fuel bonded users. The bond equals two times the maximum tax that could accrue on tax-free diesel fuel purchased or acquired in a reporting period. The minimum is $30,000, or $10,000 for a dyed diesel fuel bonded user, and the maximum is $600,000 unless the Comptroller finds undue risk.
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Section 162.212(b) has two floors. Suppliers, permissive suppliers, distributors, exporters, importers and blenders start at $30,000. A dyed diesel fuel bonded user starts at $10,000. Everyone tops out at $600,000 unless the Comptroller believes there is undue risk of lost tax revenue, in which case one or more bonds above that amount may be required.
A dyed diesel fuel bonded user license is what lets a business buy dyed diesel in amounts above the limits in Section 162.206(c). Dyed diesel bonded users file quarterly. Suppliers, importers, distributors and blenders file monthly, by the 25th of the following month.
The bond equals two times the maximum tax that could accrue on tax-free diesel fuel purchased or acquired during a reporting period. The diesel tax is twenty cents per gallon. The Comptroller also weighs the tax that has come due or is expected, your history as a license holder, and the need to protect the state. If the bond later proves too small, the Comptroller can require a new or additional one.
Posting security is not automatic. Section 162.212(b) applies when the Comptroller determines a bond is necessary to protect the state, and the Comptroller's Motor Fuels Tax Audit Manual notes the agency may waive bond requirements.
Under Section 162.211(a), a diesel license is permanent only while the required bond or security is in force and reports are timely. The Comptroller cancels any license with no diesel purchase, sale or use reported in the previous nine months.
After four consecutive years of compliance a license holder may ask for release, subject to the Comptroller's judgment about revenue risk. No bond is released until an examination or audit shows no tax, penalty or interest is owed. A surety can leave the bond on the 31st day after filing a written request, and the license is canceled unless replacement security is filed.
Not necessarily. Section 162.212(b) sets the minimum for a dyed diesel fuel bonded user at $10,000. The actual amount is two times the most tax that could accrue on your tax-free diesel in a reporting period, if that is higher.
The Comptroller requires a bond when it determines security is needed to protect the state, after looking at expected tax, licensing history and risk. The Comptroller's audit manual notes that bond requirements may be waived.
It is a continuous bond. Section 162.212(d) makes it a new obligation in the penal sum for each calendar year while it is in force, and it stays on file until the surety is released.
The surety is released on the 31st day after it files a written request with the Comptroller. File a new bond or other security before then or the Comptroller cancels the license.
Yes. Section 162.212(e) accepts cash, an assigned certificate of deposit, or an irrevocable letter of credit from an FDIC member bank or savings and loan in Texas.
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