Alabama Fuel Tax Bond Update


Motor fuel tax laws have been revamped in Alabama by a new bill. The bill is named HB 399 and states that suppliers, permissive suppliers and terminal operators must obtain a surety bond in a quantity equivalent to double the average monthly tax liability, but can’t surpass $2 million. Exporters, blenders, importers, and distributors must acquire a minimum bond of $2,000 or the “approximate amount of twice the average monthly tax liability,” whichever is larger. The new bill also states that anyone interested in multiple licenses only needs a single bond which will be calculated by the highest average monthly tax liability of the licenses that they hold. Motor fuel transporters and aviation fuel purchasers are excused of the bonding requirements.

The previous law required the supplier to obtain a bond in an amount equivalent to double the sum of its average monthly excise tax calculated by the Commissioner of the Department of Revenue. The bond minimum was $1,000 but could not surpass $25,000 unless the Commissioner decided that extra bonding was necessary.