Companies that must have a fuel tax bond include any company that distributes or uses fuel or engages in the fuel broker business. The full definition of companies that are required to hold a User of Fuel Bond is outlined in the Motor Vehicle Fuel License Tax Law and the Use Fuel Tax Law. This bond ensures the payment of any outstanding credits and taxes.
The surety bond is a legally binding contract between the three parties.
- The Principal is the company who wishes to engage is business
- The Obligee is the government agency that requires the use of the bond; in this case, it is the State Board of Equalization.
- The Surety is the agency that writes and ensures the surety bond.
The User of Fuel bond could also be called:
- Fuel Bonds
- Fuel Tax Bonds