Federal Fuel Tax Bond (Under 26 U.S. Code §4101)

Bond Penalty: Discretion of the Internal Revenue Service

Per U.S. Federal Code 26 U.S. Code § 4101, every person that incurs liabilities under the tax imposed by section 4041(a) or 4081, every person producing or importing biodiesel or alcohol, and every person producing second generation biofuel must register with the Secretary of the Treasury. A taxable fuel bond is generally required of these registrants as well as operators that are considered to be within foreign trade zones. For the purpose of registration, FTZ categories include operators of a terminal or refinery within a foreign trade zone or within a customs bonded storage facility, or holders of an inventory position with respect to a taxable fuel in such a terminal. Distributors that extend credit by credit card to any ultimate purchaser or who do not collect the amount of fuel tax from such ultimate purchaser are also obligated to register.

The federal fuel tax bond is filed with the Internal Revenue Service and the operator designated as a "bonded registrant". The treatment of the taxable fuel surety bond is addressed at length within the statute. In brief and pursuant to section (j)(2), the surety bond must be written in an amount that the district director determines will ensure timely collection of the taxes imposed by sections 4041(a)(1) and 4081, taking into account the applicant's financial capabilities, tax history, and expected liability. The district director may increase or decrease the amount of the required taxable fuel bond to take into account changes in the operator's financial condition. The bond amount may never be greater than the amount than the following thresholds:

  • The applicant's expected tax liability under sections 4041(a)(1) and 4081 for a representative 6-month period (as determined by the district director).
  • In the case of a terminal operator, the expected tax liability of persons other than the terminal operator under section 4081 with respect to taxable fuel removed at the racks of its terminals (determined as if all removals of taxable fuel were taxable) during a representative 1-month period (as determined by the district director).
  • In the case of a gasohol blender, the gasohol bonding amount.

National surety bond leader, Surety One, Inc. is available for same-day support of your new or fuel tax bond request. Our special programs allow us to offer you bonding regardless of financial statement condition. Do you operate in multiple states? No problem! We offer fuel dealer tax surety bonds in ALL of them. Call (800) 373-2804, email Underwriting@SuretyOne.com or click here for a live chat about a federal fuel tax bond.

Surety bond application review and quoting are free of charge. There is no obligation to purchase.

What We Need From You

Additional Attachments

  • Business Financial Statement (If bond over $25,000)