What is a Nevada Sales Tax Bond?
A Nevada sales tax bond is a surety bond that provides a guarantee that a retailer will abide by the state’s laws pertaining to sales tax payments. Any business operating in the state that is required to have a sales tax permit must post a surety bond as well. The Nevada sales tax bond works as an agreement between three parties: the retailer operating in Nevada, or the principal of the bond, the obligee, which is the Nevada Department of Taxation, and the surety bond company providing the bond.
When a Nevada sales tax bond is in place, it ensures that the should a retailer fail to pay sales taxes in a timely fashion, the surety remits payment to the Nevada Department of Taxation if a claim is filed against the retailer. The business then repays the surety for any claims made against them. The Nevada sales tax bond is meant to protect the Department of Taxation in Nevada from companies avoiding their sales tax obligations.
What Does a Nevada Sales Tax Bond Cost?
A Nevada sales tax bond costs a small percentage of the total bond amount required by the state. Each retailer is different in terms of how much of a surety bond it needs. This amount is calculated as three times the business’s average monthly sales tax obligation. Fortunately, the bond rate you pay is a percentage of that amount, typically ranging from 1 to 10%.
The rate you pay for your Nevada sales tax bond also depends on your financial picture. For instance, retailers who have strong credit and a track record of sound financial habits pay less than those who have questionable credit. Each year, your Nevada sales tax bond renews, giving you an opportunity to improve your financial standing to help lower the price you pay for your bond.
How Do I Get a Nevada Sales Tax Bond?
You can begin the process of securing your Nevada sales tax bond by completing a short online application. The surety company needs to review your information, including your credit history, before providing a quote. Once that takes place, you are given specific instructions on how to move forward in getting your Nevada sales tax bond.
Frequently Asked Questions
Getting a sales tax bond as a Nevada retailer is as simple as applying online, getting approved – often instantly – and signing the bond agreement. You then pay your bond premium, and the bond certificate is sent to you.
The amount of bond coverage needed for a Nevada sales tax bond depends on the amount of sales you average each month. Typically, the bond amount is equal to roughly three times your monthly sales tax obligation.
The sales tax bond form is on file with us. However, in some cases, getting the bond form directly from the obligee, the organization requiring the bond, may be necessary if it is not already on file.
The state in which your business operates provides information on the type of sales tax bond you are required to have in order to run your business in line with the law. Specific sales tax bonds may be necessary depending on the type of products sold.