Michigan Laws 207.1058 – Surety bond or cash deposit
Current as of: 2023 | Check for updates
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(1) Except as otherwise provided in this section, a person who applies for a license under this act is not required to file with the department a surety bond or cash deposit. However, the department may require a surety bond or cash deposit if the department considers it necessary to ensure payment of the tax liability of an applicant or licensee.
(2) If a surety bond or cash deposit is required, it shall be in an amount determined by the department that is not less than $2,000.00 or not more than an applicant’s 3-month tax liability as estimated by the department.
Terms Used In Michigan Laws 207.1058
- Department: means the department of treasury or its designee. See Michigan Laws 207.1002
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Importer: means a person who imports motor fuel into this state. See Michigan Laws 207.1003
- In this state: means the area within the borders of this state, including all territories within the borders owned by, held in trust by, or added to the United States of America. See Michigan Laws 207.1003
- Motor fuel: means gasoline, diesel fuel, kerosene, a mixture of gasoline, diesel fuel, or kerosene, or a mixture of gasoline, diesel fuel, or kerosene and any other substance. See Michigan Laws 207.1004
- Person: means and includes an individual, cooperative, partnership, firm, association, limited liability company, limited liability partnership, joint stock company, syndicate, and corporation, both private and municipal, and any receiver, trustee, conservator, or any other officer having jurisdiction and control of property by law or by appointment of a court other than units of government. See Michigan Laws 207.1004
- Power of attorney: A written instrument which authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. Source: OCC
- state: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories belonging to the United States; and the words "United States" shall be construed to include the district and territories. See Michigan Laws 8.3o
- Tax: means a tax, interest, or penalty levied under this act. See Michigan Laws 207.1006
- Terminal: means a motor fuel storage and distribution facility that meets all of the following requirements:
(i) Is registered as a qualified terminal by the internal revenue service. See Michigan Laws 207.1006
(3) The department shall require a supplier, a terminal operator, or a bonded importer to post an annual bond of not less than $2,000,000.00, except that if a person is a motor fuel registrant under section 4101 of the internal revenue code, the bond may be reduced to not less than $1,000,000.00. In either case, an applicant subject to this subsection may show proof of financial responsibility in lieu of posting bond. Proof of a $5,000,000.00 net worth is presumptive evidence of financial responsibility in the absence of circumstances indicating that the department is otherwise at risk with respect to collection of the tax due under this act from the applicant.
(4) The department may require an occasional importer to post a bond in an amount determined by the department but not more than $2,000,000.00. An applicant subject to this subsection may show proof of financial responsibility in lieu of posting bond. Proof of a $5,000,000.00 net worth is presumptive evidence of financial responsibility in the absence of circumstances indicating that the department is otherwise at risk with respect to collection of the tax due under this act from the applicant.
(5) If an applicant files a bond, the bond must meet all of the following requirements:
(a) The bond shall be issued by a bonding company licensed to do business in this state.
(b) The bond shall name the applicant as the principal and the state as the obligee.
(c) The bond shall be on a form prescribed by the department.
(d) The bond company’s power of attorney is attached.
(e) The bond remains in effect until the end of the current calendar year.
(6) A person who was licensed and not subject to a bond or cash deposit under this act on the effective date of this section is exempt from the requirement of subsection (1). However, the department may at a later date require the person to post a bond or cash deposit in an amount the department considers necessary to ensure payment.
(7) The department may require a bond or cash deposit in an amount the department considers necessary to ensure payment if a person who is licensed under this act on the effective date of this section forms a new business or joint business and applies under this act for a license for the new or joint business.