Indiana Sales Tax Bond

If you fail to remit your sales taxes after being required to obtain a bond, the Indiana Department of Revenue will file a claim against your bond. The surety company will investigate and, if the claim is valid, will pay the DOR up to the full bond amount to cover your unpaid taxes, penalties, and interest. However, you (the business owner) are then legally required to reimburse the surety company for the full amount they paid, plus any legal fees and expenses. This can damage your credit and ability to get bonded in the future.

The bond amount is customized based on your business's specific tax exposure and compliance history. The Indiana Department of Revenue typically calculates it as 2-3 times your average monthly sales tax liability. Common bond amounts range from $2,000 to $50,000, though the DOR may require higher or lower amounts depending on their risk assessment of your business. You'll be notified of the exact amount required when the DOR issues the bond requirement.

The Indiana Sales Tax Bond is not required for all businesses. The Indiana Department of Revenue requires it on a case-by-case basis for businesses with poor tax compliance history, repeated sales tax payment delinquencies, or when the DOR determines there is significant tax exposure or collection risk. If the DOR notifies you that a bond is required, you must obtain it before continuing operations or to resolve your tax compliance issues.