Notary Bond Application:
X
North Carolina Fuel Tax Bond
The Motor Fuels Tax Liability Bond, more commonly known as the Fuel Tax Bond, is required by the North Carolina Department of Revenue (NCDOR) to ensure that motor fuel sellers, distributors, and users submit all payments and reports that are due to the Department. The bond’s limit varies from $500 to $2,000,000 based on the type of license issued.
Buying your Fuel Tax Bond with Jet Insurance Company gives you direct access to the surety. Jet doesn’t use middlemen or brokers that complicate the bonding process or drive up fees.
How Much Does the Fuel Tax Bond Cost?
The Fuel Tax Bond cost is dependent on a soft credit check and the bond limit, which is determined by the NCDOR. Fuel Tax Bonds have limits as low as $500 and up to as much as $2,000,000, depending on the type of work you do.
With Jet, pricing for the bond starts at $100 yearly and $10 monthly. The chart below shows pricing examples at different bond limits for someone with preferred credit.
| Bond Limit | Cost |
|---|---|
| $10,000 | $100 |
| $25,000 | $250 |
| $50,000 | $500 |
For smaller bond limits, Jet may offer a rate available for purchase right away but higher limits require a closer look by one of our underwriters. Even if your application needs to be reviewed by our team, you can rest assured that Jet doesn’t bring in any third parties to offer you a rate. We don’t share your personal information with other brokers or insurance companies, and we don’t have to rely on them to offer a competitive rate. Jet works to save you time and money so you can keep conducting your business.
How Is the Bond Limit Determined for a Fuel Tax Bond?
Several businesses must hold a motor fuels tax license, some of which are required to carry a Fuel Tax Bond. If a bond is required by the NCDOR, the kind of business that you are conducting will determine the amount of coverage that must be held. The NCDOR requires bonds as follows:
- Minimum $500 to $20,000 Maximum, determined by the average monthly taxable sales and use of kerosene:
- Kerosene supplier
- Kerosene distributor
- Kerosene terminal operator
- Dyed diesel fuel distributor
| Gallons Per Month | Bond Limit |
|---|---|
| 1-60,000 | $500 |
| 60,001-100,000 | $1,000 |
| 100,001-300,000 | $2,500 |
| 300,001-600,000 | $5,000 |
| 600,001-900,000 | $7,500 |
| 900,001-1,200,000 | $10,000 |
| 1,200,001-1,500,000 | $12,500 |
| 1,500,001-1,800,000 | $15,000 |
| 1,800,001-2,000,000 | $17,500 |
| 2,000,001 and over | $20,000 |
- Minimum $2,000 to $500,000 maximum, determined by double the average monthly fuel tax liability
- Distributor
- Importer
- Blender (if the annual tax liability is $2,000 or more)
- Fuel alcohol provider (if the annual tax liability is $2,000 or more)
- Biodiesel provider (if the annual tax liability is $2,000 or more)
- Alternative fuel provider
- Retailer of alternative fuel (only if highway and nonhighway alternative fuel is stored in the same facility)
- Bulk end-user of alternative fuel (only if highway and nonhighway alternative fuel is stored in the same facility)
- $2,000,000
- Refiner
- Terminal operator
- Supplier
- Bonded Importer
How Does the Fuel Tax Bond Get Filed to the North Carolina Department of Revenue?
The NCDOR requires a completed bond form to be submitted for filing. After you purchase your bond, Jet will complete the bond form with a signature and seal. If you are licensed as an individual or a partnership, Jet will mail the bond directly to the NCDOR for filing. However, corporations and LLCs must fulfill additional requirements. Jet will mail the bond form to you to complete the bond and attach required documents.
A corporation is obligated to provide:
- A signature by a corporate officer, such as the president, vice-president, or treasurer
- A corporate attest signature (or a corporate letterhead stating why the signature is not provided by the corporate secretary)
- Corporate seal placed on the bond
An LLC is obligated to provide:
- A signature by any member of the LLC
- Company seal placed on the bond, if applicable
Once the original bond has been signed by all parties and requirements are attached, the bond can be mailed to:
North Carolina Department of Revenue
ATTN: Motor Fuel Licensing and Bonding
1429 Rock Quarry Road, Suite 105
Raleigh, NC 27610
Can the Fuel Tax Bond Be Cancelled for a Refund?
Yes! You can cancel your Fuel Tax Bond at any time and Jet will provide a refund for any unused premium. Jet does not hold onto commission fees or add cancellation fees like other companies do. You are only responsible for paying the time that the bond was active; any time left over will be calculated into your refund.
Since monthly payments are not prepaid terms, a cancellation will not come with a refund. When you need to cancel your bond, Jet will notify the NCDOR and stop payments.
When the NCDOR receives a notice of cancellation, the bond will remain in effect for 30 days. This 30-day period will still hold Jet and you liable for any damages during this time and will affect your refund or may require an additional payment.
How Does a Principal Avoid Bond Claims?
Although there are different types of businesses that require a motor fuel tax license, the Fuel Tax Bond protects the Department of Revenue from the licensees failing to make payment of taxes. Licensees are obligated to submit all reports and taxes, as well as follow the applicable laws, rules and regulations of General Statutes Chapter 105, Articles 36B, 36C, and 36D, and Chapter 119, Article 3. If any licensee fails to follow regulations, such as the nonpayment of taxes, the Department can take action on the bond. The Department may first impose a penalty for any failure of the licensee to comply.
To prevent any claims from being filed on the Fuel Tax Bond, a motor fuel tax licensee should make sure to pay their taxes and abide by the Department’s regulations. This will avoid any additional fines, issues with their license, and action on the bond.
What Happens If I Get a Bond Claim?
In the case of a claim being filed on your Fuel Tax Bond, Jet will begin an investigation to make sure that the claim is not a false accusation. However, since the Department files claims against the bond, they probably have evidence to substantiate their claim. If the claim proves valid, Jet will pay the Department the money that is owed up to the full limit of the bond, but you are still liable for paying Jet back.
Why Is the Fuel Tax Bond Required?
The Fuel Tax Bond is required by the NCDOR to guarantee that the Department receives the money owed from motor fuels taxes. It is important that the Department collects these taxes as the money is a major contributor to funds that are distributed to local governments. The Department funds services for the benefit of the people of North Carolina by creating and enforcing regulations such as the motor fuels tax liability license and surety bond. The bond protects the Department by paying out the money owed when the taxes have not been paid by the motor fuel user, seller, or distributor.
How Does the Application Process Work With Jet?
Jet’s application for the Fuel Tax Bond only takes minutes to complete! The application asks for basic licensing information and an indication of the bond limit required. An evaluation of personal credit is needed to determine an approved rate. After the application has been completed, a rate will be available for purchase online.
A higher bond limit may require an underwriter to evaluate your application before a rate can be offered. Once the evaluation is completed, Jet will notify you with an approved rate that is ready for immediate purchase.
How to Renew the Fuel Tax Bond
Renewing your bond with Jet takes just minutes and can be completed online or through mail. Jet makes sure you have plenty of time to renew by sending a notice prior to the bond’s expiration date. You will receive both an emailed and mailed renewal notice. You can click the link in the email to process your renewal or send back the completed renewal invoice with payment to keep your bond in effect.
If you are on the monthly payment program, you don’t have to worry about renewals. Your bond will stay in effect with each payment until cancellation is requested.
Does the Fuel Tax Bond Expire?
No, the Fuel Tax Bond does not expire. However, the bond may be cancelled either by you or Jet (the Surety). You might cancel the bond if you wish to no longer conduct business in North Carolina. Jet may cancel your bond for nonpayment of premium. Monthly payment plan holders must take care that their payments are completed to prevent cancellation.
