A license and Kentucky gasoline dealer bond are required in order to refine, produce, distill, manufacture, blend, compound, receive, use, sell, transport, store, or distribute any gasoline or special fuel. Pursuant to KRS §138.310, sale, storage or transportation of any gasoline or special fuel within the state of Kentucky upon which the tax has not been paid is also prohibited without a license. Gasoline tax is levied on the average wholesale price per gallon with a minimum wholesale price of $1.786 per gallon. The tax becomes a liability of the dealer when the gasoline is received or enters the dealer’s storage facility. The Kentucky gasoline dealer bond is defined as “financial security” under KRS §138.330, and is chiefly a guarantee of tax payment. Each gasoline dealer must file with the Department of Revenue a financial instrument in an amount not to exceed three (3) months’ estimated liability as computed by the department or five thousand dollars ($5,000) whichever is greater. For a new licensee, the Kentucky gasoline dealer bond must be written in a minimum amount of five thousand dollars ($5,000) until such time as an estimated three (3) months’ liability can be established by the Department. The surety bond must be conditioned upon the prompt filing of true reports by the dealer and the payment by the dealer to the State Treasurer of all gasoline and special fuel excise taxes imposed by the state, together with all penalties and interest thereon, and generally upon faithful compliance with the provisions of KRS 138.210 to 138.340. If the Kentucky gasoline dealer bond is reduced, whether by judgment rendered, payment made, or otherwise, or if the Department feels that any surety on the bond has become unsatisfactory or unacceptable, then the Department can require the dealer to file a new surety bond with satisfactory sureties in the same amount. Failure to replace the original bond will result in cancellation of the license of the licensee in accordance with the provisions of KRS 138.340. The obligation is cancelable pursuant to §138.330, the surety must be released from all liability to the state accruing on the Kentucky gasoline dealer bond after the expiration of sixty (60) days from the date upon which the surety files with the Department a written request to be released. The cancellation does not release the surety from any liability already accrued before the expiration of the sixty (60) day period. Neither the bond form nor the underlying statute address cumulative liability of the surety. The obligation may be continuous however further exploration with the Department is necessary to understand its treatment of the surety’s guarantee.
Kentucky surety leader, Surety One, Inc. underwrites fuel tax surety bonds, IFTA bonds, and fuel distributor bonds for air, maritime and ground transportion operators as well as dealers/distributors. No surety bonding company is more agile or responsive than we! We welcome applications from domestic and foreign operations. Visit us at SuretyOne.com, call (800) 373-2804, or email Underwriting@SuretyOne.com for a Kentucky gasoline dealer bond application or information regarding any bond need.