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Ohio Cigarette Tax Stamp Bond
Wholesale cigarette dealers in Ohio must file a surety bond with the Department of Taxation if they have not been in good credit standing for five consecutive years prior to the purchase of cigarette tax stamps. The bond is a guarantee to the Ohio Department of Taxation, provided by Jet Insurance Company, that wholesale cigarette dealers will pay dues on cigarette tax stamps purchased on credit.
By choosing Jet, you are working with the decision maker, allowing for a simplified process with no middlemen, such as brokers, involved.
What Is the Cost of the Cigarette Tax Stamp Bond?
The cost is dependent on two main factors: the bond limit and your personal credit (don’t worry, it’s a soft inquiry). You will only pay a small percentage of the bond limit, which is determined by the Ohio Department of Taxation. Refer to the chart below for our lowest prices at different bond limits.
| Bond Limit | Cost |
|---|---|
| $10,000 | $100 |
| $25,000 | $250 |
| $50,000 | $500 |
Choosing to pay for multiple years will save you money down the road and give you more time before having to provide a bond renewal payment.
Why Does the Ohio Department of Taxation Require This Bond?
The Department of Taxation is given the responsibility of regulating various businesses and individuals to ensure due taxes are paid to the state. Wholesale cigarette dealers are among those regulated and are required to obtain a surety bond as a financial guarantee to the Department, pursuant to Ohio Revised Code Section 5743.05, in the case that the dealer refuses or fails to provide payment for cigarette tax stamps purchased on credit. A surety company (Jet) acts as the guarantor of payment when the cigarette wholesaler defaults on their obligation.
Keep in mind, the bond is only a requirement for those who have not been in good credit standing for five consecutive years prior to purchasing cigarette tax stamps. However, the Ohio Department of Taxation may require a wholesale cigarette dealer in good credit standing to obtain a surety bond if they do not pay for their stamps on time.
How to Apply for the Cigarette Tax Stamp Bond With Jet
Jet’s application only asks for the necessary information to provide you a bond quote, including the bond limit and basic business information. A soft credit check is completed in order to provide an appropriate rate. Those with bond limits under $15,000 are able to submit information, pay for the bond, and receive the bond within minutes. If your bond limit is over $15,000, the process is still fast, but a Jet underwriter must review your application and will send an approved rate via email when ready. You will be able to purchase the bond directly online, and a copy of the bond and your receipt will be sent immediately after.
How Does the Bond Get Filed to the Ohio Department of Taxation?
Allow Jet to take care of the filing for you! Once payment is complete, Jet will send the original bond, Power of Attorney, Certificate of Compliance, and financial statement to the Ohio Department of Taxation with no additional cost to you. If you choose to file the bond yourself, that option is provided at checkout.
The bond and all other paperwork must be sent to the address below:
State of Ohio Department of Taxation
Excise & Energy Tax Division, Cigarette Tax
PO Box 530
Columbus, OH 43215
Can the Cigarette Tax Stamp Bond Be Cancelled for a Refund?
Jet does allow you to cancel the bond at any time, but keep in mind that your license may be revoked if there is no bond on file. If you are ready to cancel with us, make sure you no longer need the bond, a new bond is in place, or you are terminating your license. Just send us an email to [email protected] and we will start the cancellation process with the Ohio Department of Taxation.
The Department keeps the bond active for 60 days upon receipt of cancellation notice, which must be taken into account for any potential refunds. After the 60 days, Jet will calculate any remaining time left on the bond to refund you appropriately (when applicable).
When Does the Ohio Cigarette Tax Stamp Bond Obligation End?
The bond is only needed when the Department of Taxation sees that a wholesale cigarette dealer who is purchasing tax stamps has had five consecutive years of non-preferred credit. It is up to the Department to decide when the bond is no longer needed, so the cigarette wholesaler must renew the bond until released of that responsibility by the Department.
Jet will send you a notice to your email and mailing address when the bond’s renewal date is nearing, so you have plenty of time to provide payment either online or through the mail.
How to Avoid Ohio Cigarette Tax Stamp Bond Claims?
Abide by the Ohio Revised Code Chapter 5743 and you should be able to easily avoid any disciplinary action against your license, including a bond claim. The bond is used specifically to ensure the payment of taxes for a wholesale cigarette dealer who purchased cigarette tax stamps on credit.
The Ohio Department of Taxation will request a payout from the surety company (Jet) if you fail to make the necessary tax payments within 30 days of purchasing stamps.
What Happens if I Get a Claim on My Ohio Cigarette Tax Stamp Bond?
The Ohio Department of Taxation only requests a claim payout for the cigarette wholesaler’s failure or refusal to pay dues, but Jet will still review all details and documentation prior to making payment. A valid claim will be paid to the Department, for which you are responsible to pay Jet back. You have to reimburse Jet because the bond is an extension of credit, only paid out for your wrongdoings or negligence.
