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Nevada Tobacco Sales Tax and Stamp Bonds
To become a licensed wholesale dealer of cigarettes or other tobacco products (OTP’s), the Nevada Department of Taxation requires a performance tax bond known as the Tobacco Sales Tax Bond to be filed with their office in a custom amount.
Once licensed, the Department of Taxation allows wholesaler dealers the option of deferring payments for the purchase of revenue stamps or metered machine impressions. If the wholesale dealer would like to take advantage of this program, a Tobacco Stamp Bond will also need to be filed.
Jet Insurance Company provides both the Tobacco Sales Tax and Stamp Bonds as an assurance to the Department of Taxation that the wholesale dealer will follow the rules of their license, as well as complete all excise tax and revenue payments required. The surety bonds act as a financial guarantee for the Department of Taxation in cases where the wholesale dealer fails to fulfill such obligations.
If you are looking to become a licensed wholesale dealer of cigarettes or other tobacco products in the State of Nevada, Jet can help you acquire the necessary surety bond quickly and at an affordable price!
How Are the Costs and Bond Limits Determined for Performance Tax Bonds in Nevada?
The Nevada Department of Taxation requires a custom limit for both the Tobacco Sales Tax Bond and Tobacco Stamp Bond.
For wholesale dealers of cigarettes just looking to be licensed, the bond amount must be equal to the largest amount of tax pre-collected by the dealer in any quarter of the preceding year (for first-time licensees, the Department of Taxation will estimate what that amount could be). The same requirements go for wholesalers of other tobacco products (OTP’s) such as vapor products or any alternative nicotine products. It is important to note that if you are a wholesale dealer of both cigarettes and OTP’s, you will need a separate surety bond for these two tobacco classifications.
For those looking to be part of the revenue stamp program, the bond amount must be equal to the maximum amount of revenue stamps or metered machine impressions that the dealer may have unpaid at any time. Both bonds are required to have a minimum $1,000 limit.
At Jet, approved bond prices are based on a small percentage of the custom bond limit and the personal credit score of the wholesale dealer. For example, those seeking a $10,000 bond limit can pay as low as $100 annually or $10 monthly. You can find additional examples of possible custom bond amounts and the accompanying preferred credit rates in the chart below.
| Bond Limit | Monthly | Annual |
|---|---|---|
| $10,000 | $10 | $100 |
| $20,000 | $20 | $200 |
| $30,000 | $30 | $300 |
Jet’s monthly payment plan is exclusive to the bond market and allows your bond to stay active for as long as you'd like without having to worry about renewals. Just set up payment to your preferred account and you're all set!
Why Are the Tobacco Sales Tax Bond and Tobacco Stamp Bond Required in Nevada?
The Nevada Department of Taxation’s mission is to create a fair and effective administration of tax programs for the State of Nevada and its residents. This includes the implementation of applicable laws, regulations, and policies. Surety bonds are utilized as an extra layer of protection to ensure that rules will be followed.
The Tobacco Sales Tax Bond is required of wholesale dealers of cigarettes and other tobacco products as an assurance that they will abide by the regulations of their license and pay all excise taxes owed to the Nevada Department of Taxation promptly and correctly. The Tobacco Stamp Bond provides similar protection and holds the wholesale dealer liable if they choose to take part in the revenue stamp program. Both surety bonds act as a financial guarantee for the Department of Taxation in cases where the licensee fails to make payment of all excise taxes or revenue stamps owed. The Department of Taxation will end up receiving payment, it will just come from the surety provider first rather than directly from the wholesaler.
It is important to note that licensed wholesaler dealers of cigarettes and other tobacco products (OTP’s) who have maintained a satisfactory record for payment of excise taxes and/or deferred revenue payments for five consecutive years can qualify for an exemption of the above surety bond requirements. However, approval must be obtained from the Department of Taxation.
How to Apply for a Nevada Performance Tax Bond With Jet
The Jet team has created a quick and simple process for our bond application which can be done completely online. You can begin by filling out the required fields which include your contact information, the bond limit required, the number of years in business, and your social security number. A soft credit check will be conducted to get you an approved rate, but no need to worry as this won't affect your credit score. Once completed and reviewed by Jet, you will receive an email with approved rate options that are available for immediate purchase. Just make payment and receive a copy of your bond and receipt right away!
How Do the Tobacco Sales Tax Bond and Tobacco Stamp Bond Get Filed?
Jet can take care of filing your bond for you! The Nevada Department of Taxation requires both the Tobacco Sales Tax Bond and the Tobacco Stamp Tax Bond to be filed with their Carson City office. Each bond form filed must be the original and signed by both you and Jet. The surety bond must remain on file to maintain your license and/or status in the revenue stamp program.
If you would prefer to file your bond yourself, this option can be selected at checkout. All documentation should be sent to the following mailing address:
State of Nevada Department of Taxation
1550 College Parkway, Suite 115
Carson City, NC 89706
All forms for licensing and the revenue stamp program can be found on the “Cigarette and Other Tobacco Products Tax Forms” webpage.
Can I Cancel My Tobacco Sales Tax Bond and/or Tobacco Stamp Bond?
You may cancel your bond with Jet at any time! Simply send us a written request to [email protected] and we will proceed with sending a bond termination notice to the Nevada Department of Taxation. Once received, liability will be released within 30 days.
For those who chose to be a part of our monthly payment plan, your payments will cease as soon as the liability period has officially ended. As for refunds, Jet does not reimburse bondholders who have purchased a one-year bond term as the premium is fully earned. Although, if a multi-year bond term was purchased, Jet will refund the bondholder any unused premium found as soon as the liability period ends.
How to Renew the Nevada Tobacco Sales Tax Bond and/or Tobacco Stamp Bond
You don't have to worry about your bond expiring with Jet’s monthly payment option as your bond will remain active as long as payments are fulfilled.
For those who have paid in full for their bond, Jet will send you a renewal invoice via email and mail before your bond term’s expiration date. All you need to do is complete payment. No additional paperwork is required of you.
If your bond limit ever needs to be updated, simply let us know by email at [email protected] or call our office at 855-296-2663 and we can help you out right away!
How Does a Licensed Tobacco/OTP Wholesale Dealer Avoid Bond Claims?
Wholesale dealers of cigarettes and other tobacco products (OTP's) are expected to follow all regulations pursuant to Nevada Revised Statutes Title 32, Chapter 370 as it applies to their license and the revenue stamp program. Failure to uphold these requirements can lead to the Nevada Department of Taxation inflicting large fines onto the wholesale dealer, revoking their license, and/or a bond claim.
On the 25th of each month, wholesale dealers must make payment of any excise taxes and/or deferred stamp revenue/metered machine impressions accumulated from the preceding month. Upon request to the Nevada Department of Taxation, a five-day extension may be made, but only if good cause is shown. Failure to submit payment beyond this time period is cause for a bond claim.
The Department of Taxation will give you a chance to solve this issue via notice and all you have to do is simply pay what is owed plus a penalty fee. If you are unable or unwilling to resolve this issue, a claim will be filed on your Tobacco Sales Tax Bond and/or your Tobacco Stamp Tax Bond.
It is in your best interest to try and resolve violation matters and promptly pay what is due before your license is revoked and a costly claim is filed on your bond.
What Happens if I Get a Nevada Tobacco Sales Tax Bond and/or Tobacco Stamp Bond Claim?
Immediately notify Jet once you receive notice of a claim on your bond by the Nevada Department of Taxation. We will ask you for any details regarding your case, and if available, all documentation regarding it as well. This information will be used during our own review and investigation of the claim against you.
If the claim on your Tobacco Sales Tax Bond and/or Tobacco Stamp Bond is found to be valid, Jet is legally obligated per the surety bond form to make payment up to the bond’s limit (payouts will never exceed the bond amount). You, the wholesale dealer, are held responsible for your own actions and will ultimately be required to reimburse Jet for payments made on your behalf. An omission to do so will lead to future difficulties in obtaining surety bonds, specifically bonds that are required in Nevada’s tobacco industry.
