Alabama Sales Tax Surety Bond
$25,000 Bond – Quotes for All Credit Types
Click for a No Obligation Quote
The Alabama sales tax bond is a $25,000 surety bond required by the Alabama Department of Revenue from retailers who sell beer, wine, or tobacco and are applying for a new Alabama sales tax license — often called a resale certificate — or renewing an expired or cancelled one. It is also required from licensed retailers the Department has found non-compliant in remitting sales tax — though for that group the amount is calculated rather than fixed. The bond is a one-time requirement held for two years, and premiums start at $875 for the full term.
Alabama Sales Tax Bond Pricing – Starting at $875
| Who It Applies To | Bond Amount | Term | Starting Premium | Apply |
|---|---|---|---|---|
| New license applicants and renewals of expired or cancelled licenses (beer, wine, tobacco) | $25,000 | 2 Years | Starts at $875 | Apply Now |
| Retailers determined non-compliant by the Department | $25,000 minimum — calculated from 3 months of liability | 2 Years | Quoted on amount | Apply Now |
Alabama sales tax bonds are underwritten and priced on credit. We work with multiple carriers, including programs for applicants with credit blemishes, and will find you the best available rate.
Looking for an Alabama Liquor License Bond Instead?
Because this bond applies to retailers selling beer, wine, and tobacco, people searching for an "Alabama alcohol bond" or "Alabama liquor bond" sometimes land here — so it is worth being clear about the difference.
The Alabama sales tax bond covered on this page is required by the Alabama Department of Revenue and guarantees you collect and remit sales tax. It is triggered by your sales tax license, not by your alcohol license. Bonds connected to alcoholic beverage licensing are a separate requirement administered by the Alabama Alcoholic Beverage Control Board, and holding one does not satisfy the other. If your notice came from the ABC Board rather than the Department of Revenue, this is not the bond you need — go straight to the Alabama Liquor Surety Bond instead.
Why Do I Need an Alabama Sales Tax Bond?
Under Section 40-23-6 of the Code of Alabama 1975, retailers applying for an initial Alabama sales tax license — also known as a resale certificate — or renewing an expired or cancelled license on or after January 1, 2020 must purchase and maintain a one-time Alabama sales tax surety bond for a two-year period if they sell products such as beer, wine, or tobacco. Licensees collect sales tax from customers and hold those funds in trust for the State of Alabama, and the bond provides financial assurance of those trust monies.
The Alabama Department of Revenue requires the Alabama sales tax bond from:
- New applicants for an Alabama sales tax license who sell beer, wine, or tobacco products
- Businesses renewing an expired or cancelled license for retail alcohol or tobacco sales
- Any licensed retailer determined by the Department to be non-compliant in collecting or remitting sales tax
Retailers who do not sell beer, wine, or tobacco products are not required to obtain the surety bond. If you are registering for an Alabama sales tax license and none of those categories apply to your business, the bond requirement does not reach you.
Non-Compliant Retailers: Your Bond Amount Is Calculated, Not Fixed
This is the detail most often reported incorrectly, and getting it wrong means buying the wrong bond. If you are being bonded because the Alabama Department of Revenue has determined you non-compliant, $25,000 is the floor of your Alabama sales tax bond, not the amount.
Pursuant to Section 40-23-6(c)(1) of the Code of Alabama 1975, the non-compliant surety bond must be in the amount of the actual sales tax liability for the three months immediately preceding the non-compliant period, but not less than twenty-five thousand dollars. A retailer whose three-month liability exceeded $25,000 will be required to post the higher figure.
Before you purchase, check the notice you received from the Department for the specific amount required. If you are unsure, send us the notice and we will quote the correct bond rather than guessing at $25,000 and having the filing rejected.
Worth knowing on timing: a surety bond is not required at the point you receive a Final Assessment. The requirement is triggered when a sales tax balance remains due at the time the Final Assessment is no longer subject to appeal — that is when you are deemed non-compliant.
This Is a One-Time Bond, Not an Annual Renewal
Unlike most license bonds, the Alabama sales tax surety bond is not something you carry indefinitely. Section 40-23-6 of the Code of Alabama is titled "License required to engage in business; one-time surety bond," and subsection (d) states plainly: "After two years of continuous compliance, a licensee shall be exempt from the surety bond requirement so long as the licensee collects and timely remits sales tax pursuant to this chapter and any rules promulgated thereunder."
This applies to both groups. New and renewal applicants post $25,000 for two years. Non-compliant retailers post their calculated amount for two years. Neither is an annually renewing obligation.
In practical terms, the bond is a probationary measure. Post it, stay compliant with your sales tax collection and remittance for the full two years, and the obligation ends rather than renewing. That makes the two-year window worth protecting — a compliance lapse during it is what puts you back into the bonding requirement.
The Alternative: Depositing Certified Funds Instead
Alabama gives you a choice, and it is worth knowing about even though most retailers do not take it. Under Section 40-23-6(c)(2), any licensee required to purchase a surety bond may, in lieu of the bond, deposit certified funds with the Department equivalent to the amount of the bond.
For a $25,000 requirement that means tying up $25,000 in cash with the State of Alabama for two years, versus an Alabama sales tax bond premium starting at $875 for the same two-year term. For most businesses the bond is the obvious choice — the capital stays in the business rather than sitting with the Department. But if you would rather post the cash, that option is available to you and you should know it exists.
Which Alabama Bond Form Applies to You
Alabama uses two separate forms depending on why you are being bonded, and filing on the wrong one will cause a rejection:
- Sales Tax Surety Bond (S&U:BOND) — used by new license applicants and those renewing an expired or cancelled license. The Department also publishes Instructions for Executing the Sales Tax Surety Bond (S&U:BOND Inst) alongside it.
- Sales Tax Surety Bond (Non-Compliant Taxpayers) — a separate form used when the bond is being required because the Department has determined the licensee non-compliant.
Both forms are manuscripted and approved by the Commissioner and are available on the Alabama Department of Revenue forms page. We write on whichever form applies to your situation.
How To Get Licensed for Sales Tax in Alabama
- Determine whether the bond applies to you. It reaches new applicants and renewals of expired or cancelled licenses involving beer, wine, or tobacco, plus retailers the Department has found non-compliant. Retailers outside those categories do not need it.
- Confirm your bond amount. New applicants and renewals post $25,000. Non-compliant retailers post three months of actual liability with a $25,000 minimum — check your Department notice for the exact figure.
- Apply for your surety bond. Alabama sales tax bonds are credit-priced. Submit our one-page application for a personalized quote, including if your credit is imperfect.
- File your license application. Complete your Alabama sales tax license (resale certificate) application or renewal with the Alabama Department of Revenue at revenue.alabama.gov/sales-use.
- Submit the executed bond within 30 days. The Department notifies you by mail when a bond is required. Within 30 days of that notice you must file the bond, deposit equivalent certified funds, or file a notice of appeal with the Alabama Tax Tribunal. Miss all three and the Department may immediately cancel your license.
- Stay compliant for two years. After two years of continuous compliance, the bond requirement ends.
Bond Details at a Glance
- Bond Name: Alabama Sales Tax Surety Bond
- Bond Amount: $25,000 for new applicants and renewals / minimum $25,000 for non-compliant retailers, calculated on three months of liability
- Starting Premium: $875 for the two-year term
- Term: 2 Years — one-time requirement, not an annual renewal
- Credit Check: Required — underwritten
- Obligee: Alabama Department of Revenue, Sales and Use Tax Division
- Obligee Address: P.O. Box 327790, Montgomery, AL 36132-7790
- Governing Statute: Section 40-23-6, Code of Alabama 1975
- Effective Date: Applies to licenses applied for or renewed on or after January 1, 2020
- Bond Forms: S&U:BOND (new/renewal) or Sales Tax Surety Bond (Non-Compliant Taxpayers)
- Exemption: Section 40-23-6(d) — after two years of continuous compliance, the requirement ends
- Alternative to Bonding: Deposit of certified funds equal to the bond amount, per Section 40-23-6(c)(2)
- Appeals: Alabama Tax Tribunal, under Section 40-2A-8(a)
Frequently Asked Questions
Who needs an Alabama sales tax surety bond?
New applicants and renewals of expired or cancelled licenses involving beer, wine, or tobacco — plus any retailer the Department has determined non-compliant.
Is this bond required for all Alabama retailers?
No. Retailers who do not sell beer, wine, or tobacco products are not required to obtain the surety bond. It applies only to those specific categories and to non-compliant retailers.
How much is the bond for a non-compliant retailer?
Calculated, not fixed — three months of actual liability with a $25,000 floor. Check your Department notice for the exact figure.
Is the Alabama sales tax bond a one-time requirement?
Yes. One bond, held two years. Section 40-23-6(d) exempts you from the requirement after two years of continuous compliance.
What bond form is used?
Two forms: S&U:BOND for new applicants and renewals, and a separate Non-Compliant Taxpayers form. We write on whichever applies.
Do I need a bond as soon as I get a Final Assessment?
No. The requirement triggers only if a balance remains due once the assessment is no longer appealable.
Can I deposit cash instead of buying a surety bond?
Yes — Section 40-23-6(c)(2) allows a certified funds deposit equal to the bond amount. That means $25,000 tied up for two years versus $875 in premium.
What happens if I don't submit the bond?
The consequence is sharper than a penalty. Under Section 40-23-6(c)(3), the Department may immediately cancel your license once the 30-day window expires if you have not filed the bond, deposited certified funds, or filed a timely appeal. A cancelled license will not be renewed until you provide the bond or the deposit. Appeals go to the Alabama Tax Tribunal under Section 40-2A-8(a).
Can I get this bond with bad credit?
Yes. These bonds are credit-priced, but we work with multiple carriers including programs built for applicants with credit blemishes. Submit the application and we will find the best available rate.
How do I get started?
Click the No Obligation Quote button and complete our one-page application. We will respond with your personalized quote promptly.