Mississippi Sales Tax Surety Bonds

Learn more about Mississippi sales tax surety bonds, and apply today. Absolute Surety offers surety bonds nationwide through a convenient online application system.

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What Is It?

Every state has a vested interest in ensuring that companies operating within the state remit to the state all of the sales taxes collected in the course of doing business. Mississippi is a little different than some states in that there are several different types of Mississippi Sales Tax Surety Bonds that are required for different types of businesses.

All sales tax bonds are a form of license and permit bond, because they are a prerequisite for activating a business license.

Who Needs It?

Different forms of Mississippi sales tax surety bonds are required for:

• Any person wanting to do business in Mississippi who has no permanent business location in the state, including transient vendors and people operating a home-based business
• Any person planning to engage in the retail sales of new or used mobile homes in Mississippi
• Contractors with a physical location in Mississippi

Some people who have not complied with all applicable business tax laws in the recent past may also be required to post a sales tax surety bond equal to six months’ tax liability. This includes anyone who:

• Fails to obtain a sales tax permit before going into business
• Continues to operate a business after their sales tax permit has been revoked
• Fails to file Mississippi sales tax returns
• Fails to keep adequate records and invoices as required by Mississippi sales tax laws
• Fails or refuses to permit inspection of business sales records, or
• Fails to pay any taxes due under Mississippi sales tax laws

How Does It Work?

A surety bond agreement brings three parties together in a contract that is legally binding. In the case of a Mississippi sales tax bond, these include:

• Obligee. The Mississippi Department of Revenue is the obligee that requires the bond as a guarantee that sales taxes a business collects from consumers are remitted to the Department in accordance with state law
• Principal. The business owner purchasing the bond is the principal that collects sales taxes from customers and is required to remit them to the Department of Revenue
• Surety. The firm underwriting and issuing the bond is the surety guaranteeing that the obligee will receive payment for financial damages incurred as a result of the principal’s failure to remit sales taxes as required by law

The surety will investigate any claims filed against the bond and pay them on behalf of the principal if they prove to be valid. However, the principal is then legally obligated to reimburse the surety due to the indemnification clause included in every surety bond contract.

How Much Does It Cost?

The cost of a Mississippi sales tax bond is a small percentage of the full penal amount of the bond. The penal amount of a surety bond is the maximum amount that can be paid out on claims, which is established by the obligee. The exact percentage you will pay, or premium rate, is set by the surety based primarily on the applicant’s personal credit score.

People with good credit typically pay a premium rate in the 1% to 3% range. Those with poor credit can still get bonded, but will pay a higher premium rate.

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Contact Absolute Surety today for a quote on the Mississippi sales tax surety bond you need.

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