Texas Continuous Sales Tax Bond
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How much does a continuous seller bond cost in Texas?
The cost of a Texas comptroller bond is subject to underwriting, meaning the price you’ll pay is based on a review of your financial history, as well as the required bond amount.
The required bond amount varies based on the retailer’s total revenue accrued in the previous calendar year and is ultimately determined by the Comptroller. The sales tax bond amount is four times the amount of the retailer’s average monthly tax liability, with a maximum requirement of $100,000.
The cost of this bond is subject to underwriting, which means the price you’ll pay is based not only on your required bond amount, but also on a review of your personal credit report. Contact one of our surety specialists to find out exactly how much you’ll pay for your Texas sales tax bond!
What is a sales tax bond?
A sales tax bond, comptroller bond, or continuous bond of seller is a bond that protects the government by ensuring retailers will pay adequate sales taxes on yearly acquisitions. Failure to conduct business accordingly can result in the retailer being liable for a claim and responsible for fines up to the amount listed on the sales tax bond.
Why do I need a Texas comptroller bond?
The Texas Comptroller of Public Accounts requires all retailers in the state to obtain a continuous bond of seller before conducting business. A sales tax bond is issued to those applying for a permit to participate in business as a seller (vendor). By posting a Texas continuous bond of seller, the principal (retailer) agrees to pay all sales tax on items sold.
Sellers and retailers required to obtain this bond include:
- persons making sales at auctions of tangible personal property
- persons who make more than two sales during a 12-month period
- hotel, motel, or office owners that contract for telecommunications services
- persons who regularly solicit sales of taxable items by distributing advertising
- persons authorized to sell, rent, or lease property
If a claim is filed and found to be valid and the principal is unable to cover the cost of the claim in a timely manner, the surety will pay out to the full amount of the bond. However, the surety will then look to the principal for reimbursement.
In the event of cancellation, the surety must give the Comptroller of Public Accounts a written cancellation notice 30 days prior to the effective termination date. The surety remains liable for any claims brought against the bond during this 30-day period.
These bonds expire annually on December 31. It is suggested that renewals be submitted 30 days prior to the deadline, as the application process might be delayed during this time of year.
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