Oregon Highway Use Tax Bonds Explained
Transportation companies are required to obtain a highway use bond in order to use Oregon’s public highways.
The purpose of this bond is to ensure “the collection of fees, taxes, charges, penalties and interest due to be paid to the Oregon Department of Transportation as a result of motor carrier operations in the state.” The bond also ensures that bond holders adhere to the provisions outlined in Chapters 825 and 826 of the Oregon Revised Statutes.
If a motor carrier does not pay their taxes or engages in tax fraud, the state has a quick way of obtaining compensation via the bond. Each surety bond is underwritten by a bonding company, which is legally obliged to make good on the claim if the holder of the bond fails to.
Read on to find out how to calculate your bonding cost and apply in just a few minutes. Should you need our assistance, don’t hesitate to call us at (877)-514-5146.
Frequently Asked Questions
Who is required to post an Oregon highway use tax bond?
Motor carriers required to satisfy the bonding requirement are operators whose vehicles exceed 26,000 lbs. total, unless they have a bond waiver. A bond waiver can be granted to a new carrier if they have a Dun & Bradstreet rating of 3A2 or higher.
On the other hand, established motor carriers can obtain a bond waiver, provided they meet a long list of criteria outlined by ODOT.
How much does an Oregon highway use tax bond cost?
Each surety bond has a penal sum referring to the maximum liability of the bond holder. In this case the minimum amount is $2,000, if the company has one vehicle. For larger carriers the total amounts are calculated as follows:
- Between 2 and 5 vehicles - $2,000 plus $375 for each vehicle
- Between 6 and 10 vehicles - $2,000 plus $250 for each vehicle
- More than 10 vehicles - $2,000 plus $125 for each vehicle
Keep in mind that these amounts pertain to new carriers only. Amounts for other carriers vary based on your type of registration, number of vehicles and annual tax liability.
$2,000 Oregon highway use tax bonds usually cost $100 and can go up to $200 in some cases. For larger bond amounts, you can expect your premium to be between 1% and 3% if your credit score is good, or between 3% and 10% if you have a low score.
You can learn more details about bond costs on our dedicated page.
How do I apply for my bond?
To apply for your bond you will need to complete a few simple steps. The first one is to submit our online application which will take just a few minutes. Our experts will be in touch with you shortly to give you a free quote and assist you with the next steps: providing the necessary paperwork so that the bonding company can begin the underwriting process.
You will be asked to fill out the Oregon highway use tax bond form, sign an indemnity agreement with the surety, and possibly provide some additional documentation such as personal and business financial statements.
After paying your premium and submitting all documentation, your bond should be issued within two business days.
What can I do to prevent claims?
To make sure your motor carrier company stays out of claims, you need to know local and state laws in detail. Chapters 825 and 826 of the Oregon Revised Statutes contain valuable information about what activities might constitute a violation of your bond agreement.
You must also make sure you read ODOT’s instructions of filing highway use tax reports as there are a number of specific which can be overlooked.
If ODOT notifies you that there has been an issue with your tax report, and that you owe them compensation, it’s best to pay the claim before it goes to court. If you believe the claim is groundless, however, you can provide sufficient proof to the surety and ask for its legal assistance.