Distributor of motor fuel bond cost
Surety Bonds offers motor vehicle fuel distributor tax bonds in New York for different costs depending on each applicant’s individual credit report. Even though this bond is subject to underwriting, our experts will work hard to get you the best price possible for your unique credit situation. The bond amount varies because it is based on the amount of fuel distributed. It cannot be posted in an amount less than $50,000.
Why this bond
Posting this surety bond is a way of guaranteeing the state that the principals (distributors of motor vehicle fuel) will complete their payments of taxes or fees imposed by state or local laws. If the principal commits fraud or other damaging acts, such as falsified records of sale or an inability to pay requisite taxes on prior sales, no one will be harmed by any consequence that could potentially arise.
If the principal violates the terms of his or her bond agreement and a consumer is harmed as a result, the surety will pay for all damages up to the full bond amount.
Distributor of motor fuel bond details
The bond will remain in full force and effect unless otherwise canceled by the surety or the principal. If either party chooses to terminate the bond before its set date of expiration, a 30-day notice of cancellation is required to be given to the New York Department of Taxation and Finance. This bond also requires the signature of a notary public to acknowledge the contractual agreement between the surety, the obligee and the principal.
Become a motor fuel distributor
It is unlawful for anyone to act as a motor vehicle fuel importer, exporter or distributor without first obtaining the proper registration that allows them to do so. Anyone who transports motor fuel but does not own the fuel they are transporting is exempt from the registration requirement.
Motor fuel distributors must supply their financial records and proof of being financially reliable in order to be approved for the registration as well as to determine the bond amount that needs to be posted. Applicants need to submit Form TP128.3 (application for registration) to the Department of Taxation and Finance and your application and financial status will be reviewed from there.
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Additional information
- Bond of Distributor of Motor Fuel and/or Diesel Motor Fuel – Sample Form
- Instructions for Form TP-650. General Information.
- NYS Department of Taxation and Finance – Motor Fuel Tax Law-Registration and Bonding Requirements
- The New York State Department of Taxation and Finance – Official Homepage
- New York Tax Law Article 12-A: Tax on Gasoline and Similar Motor Fuel
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