Jefferson County, Alabama Gasoline Tax Bond

What Is the Purpose of the Jefferson Gasoline Tax Bond?

Jefferson County, Alabama requires gasoline distributors to obtain a custom Gasoline Tax Bond as a requisite of the county’s Motor Fuels Tax (Distributor) License. The surety bond ensures that gasoline distributors will follow the terms and conditions of their license, and acts as a financial guarantee for the county’s Department of Revenue in cases of the licenses not paying all fees, accrued interest, and sales taxes due to Jefferson County. 

Who Needs the Jefferson Gasoline Tax Bond?

Any person engaged in the distribution of motor fuels such as gasoline is required by the Jefferson County Department of Revenue to be licensed and bonded. No alternative to the custom Gasoline Tax Bond is available. 

What Do Surety Underwriters Need to Know About the Jefferson Gasoline Tax Bond?

Suretypedia has confirmed with various Alabama surety providers that the Jefferson County Gasoline Tax Bond is very low risk for underwriters to take on. The bond has a custom bond limit that is determined by the Director of Revenue; a personal credit check of the applicant is recommended before offering rates. 

Gasoline distributors must obtain a Motor Fuels Tax (Distributor) License before they can actively operate in Jefferson County. Once the distributor has been granted licensure status and obtainment of the required surety bond, they will be expected to follow all rules and regulations pertaining to their license, as well as state tax laws. Failure to comply may result in large fines, suspension or the permanent revocation of the distributor license, misdemeanor charges, and/or a bond claim.

Due to the severity of the penalties inflicted by Jefferson County, it is common practice for licensed gasoline distributors to try and resolve any issues before such drastic repercussions are taken. 

What Do Surety Claims Handlers Need to Know About the Jefferson Gasoline Tax Bond?

Jefferson County may file a claim on the Gasoline Tax Bond if the distributor violates tax laws pursuant to Alabama Legislation Title 40, Chapter 17, Article 2, as well as the terms pertaining to the Motor Fuels Tax (Distributor) License. 

Although, claims will typically only be filed if the licensee fails to file and/or pay all fees, interest, and sales taxes due to the county’s Department of Revenue by the 25th of each month.

It is unclear what steps will be taken by Jefferson County’s Director of Revenue before the pursuance of a bond claim occurs. It is assumed that the principal will be notified of their violation with a chance to resolve the issue through immediate payment of all taxes and any additional fees due. In cases where the principal is unable or refuses to resolve the issue, a bond claim will then be pursued.

If an official claim is filed on the Jefferson Gasoline Tax Bond, Jefferson County should give a clear timeline for the bond handling and claim payout deadline, but if they do not, it is recommended that the surety provider default to their company’s claim handling and payout timeline standards.

How Much Does the Jefferson Gasoline Tax Bond Cost?

The cost of the Jefferson Gasoline Tax Bond ranges from 1 to 10% of the custom bond limit. Rates will depend on the principal’s personal credit score, the bond term chosen, and the actual bond amount. For example, preferred credit applicants seeking a $25,000 bond limit will most likely pay $250 for a 1-year bond term. 

How Is the Gasoline Tax Bond Filed in Jefferson County, Alabama?

The Jefferson Gasoline Tax Bond must be signed and sealed by the surety provider, and must contain an original signature of the principal. Once the paperwork has been completed, the original bond form is to be filed with the Jefferson County Department of Revenue’s office.

The original signed and sealed bond and all additional paperwork such as the Motor Fuels Tax (Distributor) License application is required to be sent to the following address.

Jefferson County
Department of Revenue
A-100 Courthouse Annex
716 Richard Arrington Blvd. N.
Birmingham, AL 35203

Can the Jefferson Gasoline Tax Bond Be Cancelled?

The Jefferson Gasoline Tax Bond may be cancelled at any time by the surety provider or upon the county’s Director of Revenue’s own accord. A written request must be mailed to the Department of Revenue by the surety provider if seeking a cancellation of the bond. Liability will be released within 60 days of receiving such termination notification. 

Are Jefferson County Gasoline Tax Bonds Renewable?

Yes, the Jefferson Gasoline Tax Bond must be maintained with the principal’s Motor Fuels Tax (Distributor) License. Failure to do so will result in the immediate termination of the distributor’s license.