Wisconsin Sales Tax Bonds Explained
Wisconsin businesses that conduct taxable sales activities in the state have to obtain a tax permit. To do this, you have to post a sales tax bond.
Functioning as a safety mechanism, your bond protects the state against non-payment of due taxes on your side. Thus, it ensures your legal compliance in relation to tax remittance.
The bond works as a contract between three parties, with your retail business being the principal that needs the bonding. The obligee is the Wisconsin Department of Revenue. The surety is the third entity, which backs you through the bonding.
Questions about Sales Tax Bonds in Wisconsin
When is this bond required?
If you engage in retail sales that fall under Chapters 66, 71, 77, 78, or 139 of the Wisconsin Statutes, you need a state sales tax permit. One of the obligatory requirements that you have to meet is to get a Wisconsin sales and use tax bond. It guarantees you will follow the tax legal framework in the state.
How much do I have to pay for the bonding?
The bond amount that you have to post for your Wisconsin sales tax permit depends on the volume of taxable sales that you've made in the state. To get bonded, you have to cover a bond premium, which represents a fraction of this amount.
Your surety bond cost is based on the strength of your personal and business finances. The main indicators that your surety considers include your personal credit score, company finances, and any fixed and liquid assets. This is how the risk involved is assessed. Your bond premium will be lower if your financial status is stable. The usual good credit bonding rates are between 1% and 5%.
Can I get bonded with bad credit?
With Lance Surety Bonds' Bad Credit Surety Bonds program you can get bonded even if you're facing issues such as low credit scores, tax liens, bankruptcies, and civil judgments.
As the bonding risk is higher for applicants with financial problems, the rates are between 15% and 17%. Still, you can get a top bonding option with us, as we foster excellent relationships with a number of A-rated, T-listed surety companies.
How do I bonded?
Complete our online application form (it takes 5min) and attach the necessary documents. Afterwards we can send you an exact quote. You can then buy your sales tax bond online, and will receive from us a digital and a paper version of it.
In case you want to expand your knowledge on the bonding process, you can consult our detailed How to Get Bonded page.
Need help or have questions? Don't hesitate to contact us at (877) 514-5146.
How are bond claims handled?
The purpose of your Wisconsin sales tax bond is to guarantee that you will remit any taxes that you collect in relation to your retail sales activities in the state. If you fail to do so, you can receive a claim against your bond. This is how the state can seek compensation for suffered losses.
The maximum penal sum that you may need to repay is up to the bond amount you have provided. The surety that bonded you may cover these costs at first. However, the liability remains yours, so you have to repay it in full. Bond claims can seriously damage your business, so the wisest course of action is to avoid them altogether.
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