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California Tobacco Manufacturer and Importer Bond
The Office of the Attorney General in the California Department of Justice requires tobacco manufacturers and importers in the state to post the California Tobacco Manufacturer and Importer Bond.
This surety bond must be filed with the Attorney General by newly qualified and elevated-risk non-participating manufacturers in order to comply with the requirements of the California State Board of Equalization.
Manufacturers who fall under the category of elevated risk but not participating are those who are applying for certification from the Attorney General. In the event that the Attorney General is of the opinion that the aforementioned individuals present an increased risk of disobedience, a bond will be necessary.
This bond’s primary objective is to assure that the following responsibilities will be carried out by the manufacturer:
- Ensure that you fulfill all of the responsibilities that are outlined in Section 30165 of the California Revenue and Taxation Code as well as Article 3 and Chapter 1 of Part 3 of Division 103 of the Health and Safety Code.
- Pay all applicable state taxes for the distribution and sale of cigarettes and tobacco products inside the state of California during the calendar year in which the certification is submitted as well as the calendar year that immediately follows it.
- Indemnify any individual who would suffer injury as a result of the manufacturer’s irresponsible actions.
Tobacco manufacturers and importers in California are required to post this bond as a guarantee that tobacco manufacturers will pay the taxes that are associated with the production and sale of tobacco products. Because the amount of the bond is dependent on the individual’s credit history, the amount of the bond might vary.
Purpose
Tobacco makers and importers are required to be given a surety bond with a face value of at least $50,000 or the amount of escrow the manufacturer was compelled to deposit as a consequence of the greatest of the most recent five calendar years’ sales in order to be able to do business in the state of California. This bond must be provided in order for them to be allowed to sell their products in the state.
After receiving a license to operate, the California Tobacco Manufacturer and Importer Bond provides assurance to the Board of Equalization and the Attorney General that you will pay any sales tax, claims that are put on the bond, and unfulfilled escrow commitments.
In addition to that, the bond insures that you will satisfy any unmet escrow obligations. To secure the safety of all parties involved in transactions with the tobacco maker or importer, this surety bond must be constructed in such a way that it benefits both the people of California and the state itself.
Bond Amount
Those who have good credit ratings will be required to pay a bond premium that begins at 1% of the total bond amount.
The quantity of the bond varies from maker to manufacturer. The California State Board of Equalization is the body that will make a decision about this matter.
The minimum value of the bond is $50,000, or the amount of the escrow deposit that the manufacturer in California was obligated to make due to the greatest of its sales in California during the course of the most recent five calendar years.
Qualifications/Requirements
To be able to legally do business in the cigarette and tobacco products industry, all retailers, wholesalers, distributors, producers, and importers of tobacco products are required to get a Seller’s Permit. This is in accordance with the Cigarette and Tobacco Products Licensing Act.
To get this permission, all you have to do is submit an online application via the website that manages online registrations. You are required to also submit a California Tobacco Manufacturer and Importer Bond in order to fulfill the prerequisites for keeping their registration active.