Arizona Surety Bond
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More Info About Arizona Bonds
Here is some more in-depth info about common types of bonds in Arizona. If you have any questions, feel free to contact us, and one of our agents will be happy to assist you.
Contractor License Bonds
Arizona’s Registrar of Contractors requires contractors to obtain a license bond in order to get a license to operate in the state. The bond guarantees that the contractor will comply with applicable rules and regulations.
The total required amount of the bond depends on the license classification and expected annual gross sales volume. The cost of a contractor license bond is calculated as a small percentage of the total bond amount. The percentage varies depending on the surety company’s evaluation of the applicant’s creditworthiness.
Residential contractors must also pay an assessed amount into the Registrar’s Residential Recovery Fund or post a $200,000 bond. Companies that do both residential and commercial work may be required to obtain a dual license bond to maintain both licenses. A contractor bond must remain in force in order to avoid suspension of the contractor’s license.
Contractor Taxpayer Bonds
Transaction Privilege Tax is the term used in Arizona for sales tax. Contractors are required to obtain a contractor taxpayer bond if they:
- Have been delinquent in paying taxes
- Have a Transaction Privilege Tax license, OR
- Have a contract in excess of $50,000
Other Common Arizona Surety Bonds
Here are some of the common surety bonds issued in the state of Arizona. Most of these are required by the state to protect the public against financial loss due to the actions of a company.
- Business Service Bonds can be obtained voluntarily for companies who send employees into a customer’s home or place of business, to protect customers against theft committed by an employee.
- Title Bonds are required in order to register or transfer ownership of a vehicle lacking a title.
- Motor Vehicle Dealer Bonds are required for individuals or companies that sell, auction, or trade four or more vehicles annually.
- Sales Tax Bonds are required for the first two years that a company operated in Arizona, in an amount set by the Arizona Department of Revenue (either $2,000 or $7,000). These bonds ensure payment of sales tax to the state.
- Notary Bonds are required for individuals who notarize signatures or administer oaths in Arizona.
- Utility Bonds may be required by a utility company to ensure the customer’s payment of utility bills.
- Appraisal Management Company Bonds are required for companies that provide appraisal services in Arizona.
- Automotive Recycler Bonds are required for individuals or companies that dismantle six or more vehicles per year and sell the parts.
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