Alabama Tobacco Consignment Bond

Alabama Tobacco Consignment Bond

The Alabama Department of Revenue (AL DOR) requires qualified wholesalers or jobbers of tobacco products to file the custom Tobacco Consignment Bond as a requisite of the available tobacco stamping permit.

Jet Insurance Company provides the Alabama Tobacco Consignment Bond as an assurance to the AL DOR that permitted wholesalers or jobbers will follow the terms and conditions of their permit as well as their stamp consignment contract. The surety bond also acts as a financial guarantee in cases of the permittee failing to stand by such obligations.

VIEW YOUR BOND PRICE

The Jet team can help you get your Tobacco Consignment Bond quickly, and with monthly payments exclusive to Jet Insurance Company. 

What Is the Bond Amount and Price for the Tobacco Consignment Bond? 

The Alabama Tobacco Consignment Bond has a custom limit that is determined by the Commissioner of the Department of Revenue. Stamp purchases may not exceed the amount of the set bond limit. 

At Jet, approved prices are based on a percentage of the custom bond limit and the personal credit score of the applicant. For example, Jet’s rate for a $10,000 bond limit starts at $100 annually or $10 monthly. Refer to the chart below for additional examples of possible custom bond amounts and the accompanying preferred credit rates.

Bond LimitMonthlyAnnual
$10,000$10$100
$25,000$25$250
$50,000$50$500
AL Tobacco Consignment Bond Pricing

The Jet team believes in efficiently providing affordable surety bonds to all applicants, which is why we offer both yearly and monthly payment options to our bondholders.  

What Is the Purpose of the Alabama Tobacco Consignment Bond? 

The Alabama Department of Revenue defines qualified recipients of the tobacco stamping permit as tobacco dealers or corporations (known as wholesalers or jobbers) who purchase tobacco products directly from the manufacturer and sell wholesale only. Establishments that sell tobacco products at retail prices do not meet permit standards.

Once the necessary stamp consignment contract has been filed with the AL DOR, the tobacco stamping permit allows wholesalers or jobbers to purchase stamps at a discounted rate of 4 ¾ percent, and to pay via company checks rather than certified funds such as cash. The permittee can also defer the payment of stamps purchased in one month to the twentieth day of the next month. 

If an eligible Alabama dealer or corporation would like to take advantage of the tobacco stamping permit perks, the Tobacco Consignment Bond must be obtained in order for the permit to be issued. The purpose of the surety bond is to provide an additional assurance to the AL DOR that the wholesaler or jobber will uphold all obligations of their permit and stamp consignment contract, and that if they fail to do so, the bond will act as a financial guarantee to cover any losses endured by the Department.

How Does the Application Process Work With Jet for the Tobacco Consignment Bond? 

Jet Insurance Company has created a quick and simple process for bond applications. The online Tobacco Consignment Bond application requires general information such as the applicant’s company name, physical company address, and social security number. A soft credit check will be completed in minutes, but don't worry, this will have no affect on your credit score. A Jet team member will contact you shortly after with an approved rate. Once payment has been made, Jet will either file the bond for you, and send you a copy for your personal records, or mail you the original for you to file with the Alabama Department of Revenue. The choice is yours!

How Is the Tobacco Consignment Bond Filed With the Alabama Department of Revenue?

Jet makes it easy and can take care of filing the bond on your behalf! The Alabama Department of Revenue requires the signed and sealed Tobacco Consignment Bond to be filed with their office. The bond must remain so in order to maintain a tobacco stamping permit.

Once you have received an approved bond rate, just complete payment and the Jet team will take care of the remaining filing process. If you would prefer to send the bond in yourself, our application allows you to select that option at checkout. The signed and sealed bond should be mailed to the address below.

Alabama Department of Revenue
Business and License Tax Division
Tobacco Tax Section
P.O. Box 327555
Montgomery, AL 36132-7555

In regards to initial permit applicants, the Resident Tobacco Stamping Permit application and Non-Resident Tobacco Stamping Permit application are available online and should be sent to the above AL DOR mailing address. Once the permit has been approved, the custom Tobacco Consignment Bond will need to be filed. 

Can I Cancel My Alabama Tobacco Consignment Bond and Get a Refund? 

At Jet, you can cancel your surety bond at any time! Simply send us a written cancellation request (an email is fine), and we will proceed with mailing a bond termination notice to the Alabama Department of Revenue. Once accepted, the Commissioner will release the bond’s liability within 30 days of the receipt date. 

Regarding refunds, Jet will be required to charge bondholders who chose the monthly payment option for the 30-day liability period as the bond is still active. If the annual payment option was chosen, the Jet team will review time left on the bond to see if there is any premium available for reimbursement. 

Does the Tobacco Consignment Bond Expire in Alabama?

You won't have to worry about your bond expiring with Jet’s monthly payment option! Surety bond payments will continue to come out of your preferred account until cancellation of the Tobacco Consignment Bond is officially requested.  

For those who paid in full up front for a 1-year bond term, the Jet team will send you a renewal invoice prior to the bond term expiration date. No additional paperwork is required; payment is all that is needed. 

Wholesalers and jobbers without an active bond will automatically have their license suspended until the bonding requirement is once more fulfilled.

How Does a Permittee Avoid Tobacco Consignment Bond Claims?

Permitted Alabama wholesalers and jobbers are expected to follow state tobacco laws pursuant to Code of Alabama 1975 Sections 40-25-5 and 40-25-16, all regulations of their tobacco stamping permit, and the obligations set in their stamp consignment contract. Failure to uphold these legal requirements can lead to the Department of Revenue’s Commissioner inflicting large fines, permit suspension or permanent revocation, misdemeanor charges, and/or a possible bond claim. 

Key prohibited acts that can result in a bond claim are as follows:

If the AL DOR determines that a wholesaler or jobber has committed a permit violation or a breach of contract, notice will be sent of such violations and their penalties, which could include large fees. The Commissioner will file a claim on the Tobacco Consignment Bond if the permittee is unable or unwilling to complete payment to the Department.

It is in the best interest of the permittee to resolve violation matters and promptly pay what is due, before their permit is revoked and a claim is filed on their bond.

What Happens if I Get a Claim on the Alabama Tobacco Consignment Bond?

Once you have received the AL DOR Commissioner’s official claim notification, immediately contact Jet and provide all available information. A member of the Jet team will brief you on how our bond claim process operates, and then will proceed with a review and investigation of all claim details and any supporting documentation.

Jet Insurance Company is legally obligated by the surety bond’s terms to make payment (only up to the bond limit) if the claim is found to be justified. The permittee is ultimately responsible for their actions and must reimburse Jet for the paid out claim. Failure to fulfill payment will lead to future difficulties obtaining an Alabama surety bond, specifically the Tobacco Consignment Bond, which is required to maintain a tobacco stamping permit. This will force the wholesaler or jobber to pay full price for tobacco stamps through certified cash funds.

Alabama Tobacco Consignment Bond Form

Notary Bond Application:

X

Business Information:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Employee Dishonesty Bond Application:

Business Information:

Business Description:

Coverage Requirements:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Contract Bond Application:

X

Business Information:

Owner Information:

Job Details:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Worker's Compensation Application:

X

Business Information:

Business Description:

Coverage Requirements

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information: