What is a Texas comptroller bond?
A comptroller bond goes by various names, including sales tax bond and continuous bond of seller. To ensure they pay sales taxes, retailers in Texas must obtain this bond when applying for a tax permit. The bond protects the state if a business fails to pay any amount due to any level of government (state, city, county, etc.). If a company fails to pay taxes, it will be liable for claims the government files on its bond.
What is a comptroller?
In the U.S., a comptroller oversees accounting tasks and financial reporting procedures for organizations. They manage payroll, accounts receivable, and loan transactions and supervise the chart of accounts and general ledger, forming the basis for financial statements (Investopedia).
The Texas Comptroller “is the chief steward of the state’s finances, acting as tax collector, chief accountant, chief revenue estimator, and chief treasurer for all of state government, in addition to administering a number of other programs.” The position was established back in 1835. The Texas Comptroller of Public Accounts determines the bond amount required for an organization.
Get Your Texas Sales Tax Bond:
Quick Takeaways
- Retailers in Texas must obtain a comptroller bond when applying for a tax permit to ensure they pay all sales taxes.
- The Texas Comptroller of Public Accounts determines the bond amount required for each organization.
- According to Texas Administrative Code, applicants must post a Texas sales tax bond (or another acceptable form of security) of $100,000 or four times their average monthly tax liability – whichever is greater.
Who needs a Texas sales tax bond?
If you’re a retailer in Texas, the Texas Comptroller of Public Accounts requires you to post a comptroller bond before you begin selling. Acquiring this bond is a mandatory step in getting your sales tax permit. When you sign the bond form, you agree to pay sales taxes on all goods you sell.
Keep in mind that mixed beverage businesses and private clubs in Texas must post a gross receipts tax bond in addition to the sales tax bond (see comptroller.texas.gov for details).
How does a Texas sales tax bond work?
A comptroller/sales tax bond is a three-party agreement between the government, a merchant, and a surety. The government requires merchants to purchase bonds as safeguards. These bonds are legally binding agreements in which merchants promise to pay adequate sales taxes on yearly acquisitions.
If a merchant fails to fulfill the bond agreement (by reporting payments incorrectly or not paying enough sales taxes), the governing organization can file a claim on the bond for the money owed.
This is when the surety steps in. They will investigate the claim to ensure it’s valid. If it is, they will compensate the claimant for their losses upfront. Then the merchant will be held liable for repaying the surety in full.
How much does a Texas comptroller surety bond cost?
The cost of this type of bond varies based on an applicant’s required bond amount, business financials, and credit history, among other factors. The bond amount required will depend on an applicant’s total revenue accrued in the last calendar year. You must renew this bond annually for it to remain active – and to avoid revocation of your business permit.
According to Texas Administrative Code, applicants must post a Texas sales tax bond (or another acceptable type of security) in the amount of $100,000 or four times their average monthly tax liability – whichever is greater. Permitted retailers who’ve been delinquent in their payment of local or state sales or use taxes may need to post a bond of a greater amount.
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ZipBonds offers the fastest and most secure option for getting the surety bonds you need. Our all-digital platform is intuitive and straightforward. Apply today online or call us at 888.435.4191 to speak with an agent.
About ZipBonds.com
Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”
Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.