New Surety Bond Requirement for Non-Participating Georgia Tobacco Manufacturers
As of July 1, 2016 non-participating tobacco manufacturers in Georgia will be required to post a tobacco tax bond. The bond, according to House Bill 899, 10-13A-7-b, must be in the amount of $50,000 or in the amount of the highest amount of escrow owed in Georgia by the non-participating manufacturer in the last 12 quarters, depending on whichever is greater.
The New Georgia Tobacco Bond Requirement
The Georgia tobacco bond requirement applies only to non-participating manufacturers which are those who have not signed the Master Settlement Agreement (MSA). The MSA is an accord that imposes various prohibitions on tobacco manufacturers and sellers. It also requires them to make annual and strategic contribution payments that go towards covering Medicaid and healthcare costs of patients suffering from smoking-related illnesses.
The purpose of the bond is to cover for the failure of non-participating tobacco manufacturers to make the regular quarterly payments to an escrow account as specified in H.B. 899, 10-13-3-2. Payments must be in the amount of $0.0188482 per unit sold. These payments can be used for a variety of purposes with one of the main purposes being the covering of judgments or settlements brought against the manufacturer by the state or other parties.
If, within 15 days of the quarterly due date, non-participating manufacturers do not make the necessary payments to the escrow account, the state may file a claim against their tobacco tax bond to ensure compliance with regulations.
Licensing Requirements for Tobacco Manufacturers in Georgia
To become either a participating or non-participating licensed tobacco manufacturer in Georgia, a variety of documents must be submitted to the Georgia Department of Revenue and a $250 license fee must be paid. For a full list of the licensing requirements, see the Manufacturer/Importer page at the Department of Revenue website.
If you would like to get a free bond quote on your tobacco tax bond, apply online here and submit your bond application form. We will soon contact you with your free quote!
If you have any further questions you can contact our surety bond experts at (877) 514-5146 anytime!