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Arizona Sales Tax Bond

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What is an Arizona Sales Tax Bond?

Some businesses operating in Arizona are required to hold a valid license in order to operate legally in the state. A component of the licensing requirements mandated for certain companies is posting an Arizona sales tax bond. This type of surety bond ensures that a licensed business will comply with Arizona state laws regarding payment of sales taxes due.

An Arizona sales tax bond works similarly to other surety bonds in that it is a contract between three parties. The licensed business is known as the principal, while the state licensing authority is called the obligee. A surety company provides the bond to the principal. Businesses that do not comply with sales tax regulations in Arizona may have a claim made against their bond.

Which Businesses Need an Arizona Sales Tax Bond?

Arizona sales tax bond is a blanket term that encompasses several different types of bonds that retailers or merchants may be required to have in place. Common business operations that require a bond in this category include tobacco sales, liquor or alcohol sales, and the sale of tangible goods to customers in Arizona. The state’s Department of Revenue determines which businesses must have an Arizona sales tax bond.

Arizona Sales Tax Bond Obligee Details

In the state of Arizona, Arizona Revised Statutes 42-1125 dictate that some businesses operating in the state need a license or permit to do so. Part of the licensing requirements include the need to secure an Arizona sales tax bond that provides protection against losses for failure to pay sales taxes. The obligee of an Arizona sales tax bond is the Department of Revenue. Merchants and retailers may use the following contact information for the obligee:

Arizona Department of Revenue

1600 West Monroe Street

Phoenix, Arizona 85007

Phone: 602-255-3381

What Does an Arizona Sales Tax Bond Cost?

Each business that is required to pay sales tax in Arizona must post a sales tax bond, but the amount of the bond depends on the company’s average monthly tax liability. That number can range significantly from one business to the next. However, the price you pay for an Arizona sales tax bond is not the full bond requirement. Instead, it is calculated as a percentage of the bond total.

Arizona sales tax bond prices range from 1 to 5% for businesses that are in a good financial position. This includes a strong credit score and a clean credit history. Businesses that have fair to poor credit may pay a bond premium closer to 10% of the total bond requirement.

How Do I Get an Arizona Sales Tax Bond?

If you are a business that is required to post an Arizona sales tax bond, you can begin the process by submitting an application online. The surety company will review your application and any required financial documents necessary to determine your bond rate, and then walk you through the process of finalizing your bond.

Expiration Date and Renewal Term for Arizona Sales Tax Bonds

No set expiration date or renewal term exists for Arizona sales tax bonds. This is because the state mandates bonds to be continuous, meaning they remain in force until canceled. The surety company providing an Arizona sales tax bond may require renewal periodically. When this takes place, information about the renewal process and time frame for that renewal is sent from the surety company to the principal of the Arizona sales tax bond.

Frequent Questions

What is the process?

Apply online, get approved instantly, sign the indemnity agreement, pay on our website and we will send the bond to you.

Where can I get a sales use tax bond form?

We have forms on file. If you do not see your bond, you need to obtain the bond form from the obligee (the one requiring the bond).

How is the bond amount calculated?

It is generally based on the business location and dollar amount of sales. You need to determine the bond amount with the specific government department requiring the bond of you.

Which sales tax bond do I need?

The type of sales tax bond needed will vary by the type of goods being sold, and the state in which your business operates. It is recommended that you contact your state directly to determine any bond requirements, as these may be modified without notification.

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Our company has been with JW Surety for several years now so when we needed to obtain a bond for a new company, we immediately went to them for help. Our rep, Melissa, was extremely helpful and prompt which made the process extremely easy for me.
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Trying to get a local Surety Bond was like driving a car on three tires. I searched Surety Bonds and found JW Surety Bonds. I got online and filled out the information and with in 30 minutes received a response from Melissa. She was informative, friendly and helpful. One more super satisfied customer.

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We are a family owned and operated agency established in 2003. We started with just two people, and grew to become the largest volume bond producer in the nation with 50+ employees. Since day one, our team focus has been on providing real-time online quotes, an easy process, and the best in claims defense. Learn more about our company.