Who needs this bond?

You may need a Cigarette and Tobacco Distributor and Tax Bond (often called a cigarette tax bond) if you sell, distribute, or wholesale tobacco products and your state requires a bond to obtain or renew your tobacco-related license. This bond is commonly required by the government agency that oversees tobacco tax collection. The purpose is to provide financial protection to the state if required tobacco taxes, fees, or penalties are not paid.

How much does this bond cost?

The price you pay is a yearly premium that is usually a small percentage of the bond amount required by the state. Premium rates commonly fall in the 1% to 10% range, and the exact rate depends on factors like your credit, financial strength, and the bond amount set by the agency. Applicants with stronger credit typically qualify for lower rates, while applicants with credit challenges may pay more.

How do I get this bond?

First, confirm the bond requirement for your tobacco license, including the bond amount and how the bond must be filed. Then you apply through a surety company, which reviews your application and typically runs a credit check to determine your rate. Once approved and paid for, the bond is issued so you can submit it to the licensing or tax agency as part of your licensing or renewal process.

Can I get this bond with bad credit?

Yes, bad credit does not automatically prevent you from getting a cigarette and tobacco distributor bond. Many applicants with lower credit scores or other financial issues can still qualify, although the premium is often higher. If a claim is paid because taxes or related amounts were not paid, the business is responsible for reimbursing the surety for what was paid out.

How fast can I get this bond?

In many cases, these bonds can be issued quickly once your application is complete and the surety has enough information to provide a quote. Timing can vary depending on the state’s requirements, the bond amount, and how quickly underwriting can review your application, especially if additional financial details are needed.

If you’re unsure which bond you need, BOSS Bonds can review your licensing paperwork and help identify the correct bond at no cost.