Mississippi Sales Tax Bond
If you intend to open a business in Mississippi that collects sales tax, prepare to get a Mississippi sales tax bond. You won't be able to operate your business legally until you have proof of surety bond coverage. This simple guide covers the important details.
How Does a Sales Tax Bond in Mississippi Work?
If a business fails to pay the Mississippi Department of Revenue (MDR) the full sales tax amount it owes to the state, the MDR may file a claim against the sales tax bond. The company that issues and backs the bond guarantees that valid claims will immediately be paid in full. After paying, however, the bond company will work to collect the claim amount (plus interest and fees) from the business that caused the claim because of an unpaid tax bill. Here are the three parties involved in all surety bond types:
- Principal –The party that obtains the bond and accepts financial liability for claims. The principal in this case is the business owner.
- Obligee – The party that requires the bond and files claims against it due to misconduct by the principal. The MDR is the obligee in this bond agreement.
- Surety – The company that issues and backs the bond. The surety will pay the obligee for claims, but the principal must always repay that debt or face collections.
Mississippi Sales Tax Surety Bond Requirements
Any business that collects sales tax in Mississippi, including "transient" businesses that do not have a permanent location, will need to obtain a sales tax permit from the MDR. One of the requirements for getting a permit is having a sales tax bond. The exact bond needed and the amount of coverage it must provide can vary depending on the type of business. If you need help making sense of your surety bond requirements, Viking Bond Service is here to help. Contact us to get your bond requirements right.
How to Get a Sales Tax Bond in Mississippi
The good news is that getting a sales tax surety bond takes little time or effort. You will just need to complete a standard bond application, which asks for details about your business, finances, and background. Next, you will submit to a credit check and turn over any other paperwork the bond company asks for. You will then receive a quote for the bond cost, which is called the premium. Bond coverage activates after you pay the premium, at which time the bond company supplies proof of coverage to give to the MDR.
The Cost of a Sales Tax Bond in Mississippi
Surety bonds have maximum coverage amounts, meaning the total amount the surety agrees to pay to settle claims. The surety bond cost will be a small percentage of the coverage total. How much exactly will depend on the bond seeker's credit score and financial history. Great credit leads to lower premiums. However, credit scores below 700 or blemishes on a financial record lead to higher bond costs.
Some surety companies will even reject applicants because of bad credit. Viking Bond Service, on the other hand, created a bad credit surety bond program specifically to help people get bonds at fair prices even with imperfect credit. Don't let your credit keep you from getting a bond or starting a business in Mississippi!
Renewing a Mississippi Sales Tax Bond
You will need to keep a bond active and in good standing for as long as you collect sales tax. That will involve renewing the bond on an annual basis. The bond company will run a credit check during renewal and adjust the premium up or down based on changes to credit standing. One way to lower bond costs over the long term is to continually improve credit standing.
Viking Bond Service - Serving Mississippi
For business owners who want to get a bond as quickly, easily, and affordably as possible, count on Viking Bond Service. You can request a quote at any time and expect to get a response within 24 hours. You can also expect to pay competitive rates and to receive great service throughout. If you have questions or need more info, don't hesitate to reach out – contact us online or call 1-888-2-SURETY (1-888-278-7389).
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