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Class: Fuel Tax Surety Bonds

Mississippi Contractor Blanket Bond (To Include Diesel Fuel)

The following provides a brief summary of Sales and Use Tax information for construction contractors. The Sales Tax Law levies a 3.5% Contractor tax on all non-residential construction activities when the total contract price or compensation received exceeds $10,000.00. Material Purchase Certificate (MPC) Prior to beginning work, the prime contractor(s) is required to apply for a MPC for the contract .You may apply for a MPC on TAP . For non-residential contracts exceeding $75,000.00, the Contractor tax and any use tax due must be paid before work begins. An exception to paying the taxes due requires that a surety bond is filed with the DOR to guarantee payment of the taxes. All contractors without a physical location in Mississippi are required to prepay the taxes due or bond all contracts over $10,000. Contractors with a physical location in Mississippi are required to bond or prepay the taxes due on all contracts over $75,000. The 3.5% Contractor tax is imposed against the prime contractor and is due on all non-residential, commercial contracts regardless of whether or not the owner is a governmental, exempt, or non-profit entity. As example construction contracts for the U.S. Government, the State of Mississippi, a non-profit hospital, or a church are subject to the tax. Residential construction (not including apartments or condominiums) is excluded from the 3.5% Contractor tax, but is subject to retail sales taxes. Additional information regarding Sales and Use Tax is available through notices and technical bulletins, the Mississippi Administrative Code Title 35 Part IV ?(Sub-part 10, Chapter 1) and the Mississippi Code, Title 27, Chapter 65 and Chapter 67.

Mississippi Petroleum Tax Bond

Mississippi Petroleum Tax Bond A distributor is any person who receives, imports, acquires, purchases, sells or distributes any taxable petroleum product (gasoline, ethanol, aviation gasoline, dyed diesel fuel, undyed diesel fuel, kerosene, fuel oil, bio-diesel or jet fuel, compressed gas or lubricating oil [motor oil]) on which the petroleum excise taxes have not been paid or any person engaged in business as a refiner, blender, marine terminal or pipeline terminal operator, any person who exports Special Fuel (dyed diesel fuel, undyed diesel fuel, kerosene, fuel oil, bio-diesel or jet fuel), or any person engaged in the distribution of Special Fuel by tank car, tank truck or both or any person licensed to sell gasoline or diesel fuel in another state or jurisdiction who is authorized by that state or jurisdiction to collect the Mississippi Gasoline Taxes and Diesel Fuel Taxes. Such person is required to obtain distributor’s permits from the Department of Revenue before engaging in business and to post a bond in an amount to be determined by the Department.

South Carolina Motor Fuel User Fee Bond

South Carolina Motor Fuel User Fee Bond The South Carolina State Motor Fuel User Fee Bond is required by the South Carolina Department of Revenue. The bond guarantees that the applicant will pay all of the user fees, penalties, and/or interest which may be due under the provisions of chapters 28 and 54, title 12, Code of Laws of South Carolina.

Fuel Tax Bonds

Fuel tax surety bonds are a type of surety bond that is required by the government for businesses involved in the sale, distribution, or storage of fuel. These bonds are designed to protect the government and consumers from any potential financial losses that may occur due to non-payment of fuel taxes. In this blog post, we will explore the importance of fuel tax surety bonds and how they work, as well as the benefits they provide for both businesses and the government.

The Importance of Fuel Tax Surety Bonds

Ensuring Compliance with Tax Obligations

  • Fuel tax surety bonds serve as a guarantee that businesses will fulfill their tax obligations to the government.
  • By requiring these bonds, the government can ensure that businesses are collecting and remitting the appropriate amount of fuel taxes.

Protecting the Government and Consumers

  • Fuel tax surety bonds provide financial protection to the government and consumers in the event of non-payment of fuel taxes.
  • If a business fails to pay the required fuel taxes, the bond can be used to compensate the government for the unpaid taxes.

How Fuel Tax Surety Bonds Work

Obtaining a Bond

  • Businesses must apply for a fuel tax surety bond through a surety bond provider.
  • The bond amount is determined by the government and is based on the expected fuel tax liability of the business.

Bond Premiums and Obligations

  • Businesses are required to pay a premium for the bond, which is typically a percentage of the bond amount.
  • The bond remains in effect as long as the business continues to meet its tax obligations.

Claims and Indemnification

  • If a business fails to pay the required fuel taxes, the government can make a claim against the bond.
  • The surety bond provider will investigate the claim and if it is found to be valid, they will compensate the government up to the bond amount.
  • The business is then responsible for reimbursing the surety bond provider for the amount paid out.

Conclusion

Fuel tax surety bonds play a crucial role in ensuring compliance with tax obligations and protecting the government and consumers from financial losses. By requiring businesses involved in the sale, distribution, or storage of fuel to obtain these bonds, the government can maintain the integrity of the fuel tax system. Additionally, fuel tax surety bonds provide businesses with financial protection and increase consumer confidence. Overall, these bonds are an essential tool in the fuel industry that benefits both businesses and the government.

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