The state legislature has passed a new statute (Section 40-23-6, Code of Alabama 1975) which will require an Alabama sales tax bond from specific businesses that register for a new sales tax license or are renewing an expired or cancelled license. Retail businesses (generally engaged in the sale of beer, wine or tobacco products) are required to obtain a license from the Alabama Department of Revenue. Licensees must collect sales tax from their customers and hold said taxes in trust for the State. The sales tax surety bond provides financial assurance of those trust monies.
Pursuant to Section (b)(1), "Any person applying for an initial license or the renewal of an expired or cancelled license on or after January 1, 2020, who is in the business of selling at retail products that may be purchased from a seller, as defined in 27 Section 40-23-260, Code of Alabama 1975, shall be required to purchase and maintain a one-time surety bond for a two year period". The Alabama sales tax surety bond must be issued by a surety company license to do business in the state and in the amount of twenty five thousand dollars ($25,000). The surety bond form has been manuscripted and approved by the Commissioner. The bond runs to the department and is conditioned upon the licensee collecting and remitting sales tax pursuant to the prevailing law and any rules promulgated by the department. After two years of continuous compliance a licensee is exempt from the surety bond requirement. Questions may be directed to:
Alabama Department of Revenue
P.O. Box 327710
Montgomery, AL 36132-7710
Alabama surety bond leader, Surety One, Inc. offers this class of surety bond to all applicants regardless of credit condition. Call (800) 373-2804, email Underwriting@SuretyOne.com, or click here for live chat about an Alabama sales tax surety bond application or for further information about this or other insurance coverages.
Surety bond application review and quoting are free of charge. There is no obligation to purchase.