Alaska Surety Bond for Deferred Payment of Cigarette Tax Stamps

The Alaska Department of Revenue's Tax Division collects tobacco taxes for the state. Those who import, manufacture, sell, purchase, possess, or acquire cigarettes as a manufacturer, distributor, direct-buying retailer, vending machine operator, or buyer must obtain a license from the Department of Revenue. A license is not required for tobacco products other than cigarettes that are brought into the state for personal consumption.

Cigarette taxes are paid with the use of cigarette tax stamps. Tax stamps are required to be affixed to bottom of packages of cigarettes before the sale or distribution in the state. A stamp is evidence of payment of the cigarette excise tax.

Payment for tax stamps is due at the time they are ordered unless the purchaser has been approved to purchase the stamps on a deferred payment basis. If a purchaser chooses to do this, they must post a surety bond and complete Form 04-623, "Application to Purchase Cigarette Tax Stamps on Deferred Payment Basis."

Exempt from the cigarette tax are sales to authorized military personnel by a military exchange, commissary or ship store, and sales by an Indian reservation business located within in Indian reservation to members of the reservation.

Surety Bond Requirement for Deferring Payment

Payment of the cigarette excise tax is due at the time they are ordered unless the purchaser has prior written approval from the Department to purchase tax stamps on a deferred payment basis. In this case, the purchaser must obtain a surety bond, which guarantees the payment of all cigarette taxes, penalties, and interest that becomes due to the State of Alaska.

The bond amount is determined by the maximum dollar amount of cigarette tax stamps being purchased on a deferred basis each month. The bond must be 100% of that dollar amount and must be obtained before the Department will review a request for deferral. Once an application has been approved, cigarette tax stamps may be purchased on a deferred basis. The approval expires at the same time as the bond.

Those who defer payments must make their payment by the end of the month following the month in which tax stamps were purchased.

If a payment is not made, the bond is no longer valid, or the purchaser violates statutes or regulations related to the collection of taxes, they can be suspended from purchasing tax stamps, or have a reduction in the amount they are allowed to purchase on a deferred payment basis.

Did You Know?

It can take up to two weeks to receive tax stamps once they are ordered.

What Does This Bond Cost?

The premium you pay for an Alaska Cigarette Tax Stamp Surety Bond depends on the bond amount and your credit. SuretyGroup.com's low rates start at $100 for bond amounts $10,000 and under, and 1% of the bond amount over $10,000 with good credit. Contact our Surety Bond Specialists for a free quote that fits your specific situation.

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