Mississippi Sales Tax Bonds
Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all your Mississippi sales tax bond needs.
What Are They?
Mississippi imposes a sales tax on certain goods and services, requiring vendors to collect the applicable taxes from their customers and remit them to the state. A Mississippi sales tax bond is a vendor’s guarantee to pay all sales taxes due to the state. It also provides financial protection for the state in the event of a vendor’s nonpayment of sales taxes or penalties assessed by the Department of Revenue.
Who Needs Them?
Mississippi requires several different types of sales tax bonds for different types of businesses. For example, there are two sales, use, and special fuel tax bonds for contractors—one for contractors’ blanket sales and one for contractors’ job sales. The Department of Revenue can tell you whether your particular business is required to collect sales taxes from customers.
Any business selling goods or services subject to Mississippi sales tax must register with the Mississippi Department of Revenue and obtain a sales tax permit. This includes transient vendors operating in Mississippi but lacking a permanent place of business in the state. Purchasing a Mississippi sales tax bond is the prerequisite for obtaining a sales tax permit.
Speak with a Surety Bond Professionals agent today to discuss your bonding needs.
How Do They Work?
The surety bond agreement for a Mississippi sales tax bond legally binds these three parties:
- The Mississippi Department of Revenue is the “obligee” requiring the bond.
- The vendor purchasing the bond is the “principal.”
- The surety company approving the sales tax bond is the “surety.”
The obligee establishes the required bond amount, or penal sum, which is the maximum amount that will be paid out on a valid claim. That amount is based on the vendor’s prior sales history.
Upon receipt of a claim, the surety will make sure it’s valid and may attempt to negotiate an amicable settlement. Absent a settlement, the surety will pay the claim on behalf of the principal. The principal bears the full legal responsibility for paying claims and therefore is legally obligated to repay the surety.
What Do They Cost?
The principal pays an annual premium for a Mississippi sales tax bond, with that premium being a percentage of the required bond amount. The surety sets the premium rate based largely on the principal’s personal credit score, which is the best indicator of the risk the surety would assume in paying a claim on behalf of the principal.
The better the principal’s credit score, the lower the premium rate. A principal with good credit will pay an annual premium that’s in the range of 1% to 3% of the required bond amount.
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Our surety bond professionals will get you the Mississippi sales tax bond you need at a competitive rate.