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Alabama Motor Fuels Bonds
The Alabama Department of Revenue (AL DOR) requires applicable individuals in the motor fuels industry to obtain a Motor Fuels Surety Bond as a requisite of the Motor Fuels Excise Tax License.
Jet Insurance Company provides each type of Motor Fuels Bond as an instrument to reassure the AL DOR that the applicant will follow the terms and conditions of their license, as well as the associated state tax legislation. The surety bond also acts as a financial guarantee to ensure that the state will receive all tax payments due for motor fuels.
Purchasing your Motor Fuels Bond with Jet gives you direct access to your surety carrier! We don't use middlemen brokers or agents that complicate the bond process and drive up fees.
How Much Does the Motor Fuels Bond Cost in Alabama?
The cost of the Motor Fuels Bond is dependent upon a soft credit check of the applicant and the required bond limit, which is determined by the Alabama Department of Revenue. Depending on the type of work conducted by the licensee, the surety bond can be required to have an amount as low as $2,000 or as high as a $2,000,000 limit.
With Jet, rates start at $100 annually or $10 monthly. Further preferred credit pricing examples and the various AL DOR bond limits can be found in the chart below.
| Bond Limit | Monthly | Annual |
|---|---|---|
| $10,000 | $10 | $100 |
| $25,000 | $25 | $250 |
| $50,000 | $50 | $500 |
Higher limits may require a closer look by one of our underwriters. But don't worry, the review process is quick because Jet works directly with you, removing third parties from the bonding process. A Jet team member will contact you directly with affordable prices and bond term options.
How Do I Determine My Motor Fuels Surety Bond Limit?
According to the Code of Alabama Section 40-17-335, Motor Fuels Bond limits are based on the applicant’s license classification and must be approved by the Alabama Department of Revenue’s Commissioner before a license is granted.
Motor fuels suppliers, permissive suppliers, and terminal operators must hold a bond in a limit that is approximately twice their average monthly tax liability, or at a maximum of $2,000,000.
Motor fuels exporters, importers, distributors, and blenders must carry a minimum bond limit of $2,000 or approximately twice their average monthly tax liability, whichever amount is greater.
An additional Motor Fuels Bond may be required by the Commissioner for motor fuels suppliers, permissive suppliers, and distributors if the licensee’s existing surety bond is unsatisfactory or has an insufficient limit. The additional bond’s limit shall be no more than the average amount of excise taxes owed in a two-month period by the licensee.
How to Apply for the Motor Fuels Bond With Jet
Our online application only takes a few short minutes to complete! The Motor Fuels Surety Bond application will ask for your license classification information and an indication of the bond limit required by the Commissioner. A quick evaluation of personal credit determines the rate that is approved.
After the application has been submitted and reviewed, a Jet team member will send over available rates that can be immediately purchased online. Jet will take care of the rest once payment has been fulfilled.
Can Jet File the Alabama Motor Fuels Bond for Me?
Yes, Jet makes it easy and handles the bond filing process for you! The original signed and sealed Motor Fuels Bond is required to be filed with the Business and License Division of the Alabama Department of Revenue.
If you would like to send in the bond yourself, the option to do so is available at checkout. The original signed bond form and any additional paperwork needed must be mailed to the following address:
Alabama Department of Revenue
Business and License Division
Motor Fuels Section
PO Box 327540
Montgomery, AL 36132-7540
For those who are applying with the AL DOR for the first time, the Alabama Motor Fuel Excise Tax License application also needs to be sent to the address above. The Commissioner must approve the application and requested bond limit before the Motor Fuels Surety Bond can be officially filed. Further instructions for the application can be found here.
Can I Cancel My Alabama Motor Fuels Bond? Are Refunds Available?
Yes, you may cancel your bond with Jet at any time! Simply send us a written cancellation request — an email to [email protected] is the easiest option. Once reviewed, the Jet team will proceed with mailing a bond termination notice to the Alabama Department of Revenue. The liability of the bond will be released 30 days after the AL DOR Commissioner receives the notice.
If your Motor Fuels Bond has been paid for through our annual option, you may be able to receive a refund. Once the liability period has ended, Jet will send you a reimbursement for any premium left on the bond. With monthly payment holders, your payments will stop once your bond is no longer active.
The AL DOR allows licensees to file a new bond with their department within 30 days of the original bond’s cancellation date if they are looking to keep their license in good standing.
How to Renew the Motor Fuels Surety Bond in Alabama
The Motor Fuels Bond is continuous until cancelled, but will need to be renewed at the end of your bond term to remain active. To maintain active licensure status with the Alabama Department of Revenue, you must pay the renewal premium for the new bond term to continue coverage.
For annual bond term holders, the Jet team will send you a renewal invoice well in advance of your renewal date. No additional paperwork is required; payment is all that is needed.
At Jet, monthly payment bond holders don't have to worry about renewing! Payments for the Motor Fuel Bond will continue to come out of your preferred account until cancellation is requested.
How Does a Licensee Avoid Motor Fuels Bond Claims?
Alabama motor fuels suppliers, permissive suppliers, terminal operators, exporters, importers, distributors, and blenders are expected to follow all rules and regulations of Alabama Legislature, Title 40, Chapter 17, Article 12 as it pertains to their individual license. Failure to uphold these terms may result in a number of penalties — less serious punishments include warning letters from the Alabama Department of Revenue or a license suspension while subsequent and severe transgressions may lead to fines up to $10,000 per violation, permanent revocation of licensure status, misdemeanor charges, and/or a claim on the Motor Fuels Bond.
Each job classification listed above must file an excise tax return according to their license. The preceding month’s tax return and report are to be filed with the AL DOR Commissioner by the 22nd of each month. If the licensee has not submitted these requirements within 30 days of the original monthly due date, the AL DOR will notify the licensee of their offense with a chance to remedy the issue through immediate payment of all taxes and penalty fees due. In cases of the licensee being unable to or simply refusing to resolve the infringement, the Commissioner will file an official claim on the Motor Fuels Bond.
All in all, you can avoid claims being filed on your Motor Fuels Surety Bond by merely filing all excise taxes and reports on time to the AL DOR.
What Happens if I Get an Alabama Motor Fuels Surety Bond Claim?
Contact Jet if you receive notice of a bond claim from the Alabama Department of Revenue. A Jet team member will immediately brief you on how our standard claim process works and proceed with a review and investigation of all available information pertaining to your case. If the Commissioner’s claim is found to be justified, Jet Insurance Company is obligated to make payment up to the full limit of the bond.
You are ultimately held responsible for your actions and must pay Jet back for any paid out claims. An omission to fulfill this obligation will lead to difficulties in securing a new surety bond in the State of Alabama, specifically the Motor Fuels Bond, which must be acquired to legally work within the motor fuels industry.
