Out of State Tax Bond
Secure your business and stay compliant with Out-of-State Tax Bonds. If your business operates across state lines or sells products in multiple states, many states require an Out-of-State Tax Bond to ensure you pay all applicable taxes. This bond protects the state from unpaid taxes while allowing your business to operate legally in states where you do not have a physical presence.
Apply below, call our Commercial Department at 407-786-7770 or email us at [email protected]
Why You Need an Out-of-State Tax Bond
- Ensure Compliance: Most states require the bond to issue a sales tax or business license to out-of-state companies.
- Protect Your Business: Avoid fines, penalties, or license revocation for failing to pay taxes.
- Facilitate Expansion: Enables your business to sell goods or services in other states legally.
- Maintain Good Standing: Shows states that your business is financially responsible and trustworthy.
Out-of-State Tax Bond FAQs
These are some of the most common questions asked about Out-of-State Tax Bonds and how they work.
An Out-of-State Tax Bond is a type of surety bond required by a state’s Department of Revenue or Tax Commission for businesses that sell goods or services across state lines. It guarantees payment of taxes such as:
Sales and use taxes
Excise taxes
Franchise or gross receipts taxes
Other state-level business taxes
The bond ensures that the state can recover unpaid taxes if your business fails to remit them.
You only pay the surety premium, not the full bond amount. Premiums typically range from 1%–10% of the bond value, depending on:
Bond amount required by the state
Your personal and business credit
Business financials and history
Number of states where the bond is needed
For example, a $50,000 bond might cost $500–$5,000 per year depending on underwriting factors.
- Apply for the bond with a licensed surety company.
- Provide business information and financials for underwriting.
- The surety issues the bond naming the state as the obligee.
- The bond protects the state—if taxes aren’t paid, the state can file a claim.
- The business reimburses the surety for any valid claim paid.
Businesses that typically need an Out-of-State Tax Bond include:
E-commerce retailers selling to customers in other states
Manufacturers and wholesalers distributing products nationwide
Contractors or service providers working across multiple states
Businesses registering for sales tax collection in states where they have no physical presence
Each state sets its own requirements and bond amounts, so it’s important to confirm regulations in every state you plan to operate.
Call us at 407-786-7770 or email us at [email protected]
Q: What states require an Out-of-State Tax Bond?
A: Many states require out-of-state businesses to post a tax bond before registering for a sales tax permit or business license. Requirements vary, so check with each state’s Department of Revenue.
Q: Who is considered an out-of-state business?
A: Any company selling goods or services in a state where it has no physical presence, office, or employees may be considered out-of-state.
Q: How long is the bond valid?
A: Bonds are usually annual, but may need renewal or adjustment if your business grows or expands into new states.
Q: What happens if a claim is made?
A: If the state files a valid claim for unpaid taxes, the surety pays the state up to the bond amount. Your business must then reimburse the surety.
Q: Can I use one bond for multiple states?
A: Some states allow a multi-state or blanket bond, but most require separate bonds for each state where you do business.