Arkansas Cigarette Stamp Deputy Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain an Arkansas Cigarette Stamp Deputy bond.
At a Glance:
- Lowest Cost: $100 per year or $10 a month
- Bond Amount: Determined on a case-by-case basis (more on this later)
- Who Needs It: All cigarette stamp deputies operating in Arkansas
- Purpose: To ensure that the Department of Finance and Administration will receive compensation for financial harm if the cigarette stamp deputy fails to fulfill all tax collection duties
- Who Regulates Cigarette Stamp Deputies in Arkansas: The Arkansas Department of Finance and Administration
Background
Arkansas Code Annotated 26-57-236 requires all appointed and commissioned cigarette stamp deputies in the state to obtain a surety bond. The Arkansas Legislature enacted the surety bond requirement to ensure that the Department of Finance and Administration will receive compensation for financial harm if the cigarette stamp deputy fails to fulfill all tax collection duties. To provide financial security for the enforcement of such laws, cigarette stamp deputies must purchase and maintain a surety bond to be eligible for appointment and commission.
What Is the Purpose of the Arkansas Cigarette Stamp Deputy Bond?
Arkansas Code Annotated 26-57-236 requires all cigarette stamp deputies to purchase a surety bond as a prerequisite for appointment and commission by the Department of Finance and Administration Secretary. The bond ensures that restitution is available to the Department should the cigarette stamp deputy fail to abide by the regulations outlined in the Arkansas Code Annotated Title 26, Subtitle 5, Chapter 57. Specifically, the bond protects the Department should the cigarette stamp deputy fail to fulfill all tax collection duties. In short, the bond is a type of insurance that protects the State of Arkansas if the cigarette stamp deputy violates the terms of their appointment and commission.
How Can an Insurance Agent Obtain an Arkansas Cigarette Stamp Deputy Bond?
BondExchange makes obtaining an Arkansas Cigarette Stamp Deputy bond easy. Simply log in to your account and use our keyword search to find the “cigarette stamp deputy” bond in our database. Don’t have a login? Enroll now, and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
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How Is the Bond Amount Determined?
According to Arkansas Code Annotated 26-57-236F, the Cigarette Stamp Deputy bond amount is determined by the Secretary of the Department of Finance and Administration. It is important to note that a cigarette stamp deputy open account cannot exceed 75% of the total bond amount provided.
Is a Credit Check Required for the Arkansas Cigarette Stamp Deputy Bond?
Surety companies will run a credit check on the cigarette stamp deputy to determine eligibility and pricing for the Arkansas Cigarette Stamp Deputy bond. Applicants with excellent credit and work experience can expect to receive the best rates. Some surety companies may decline applicants with poor credit or have to pay higher rates. The credit check is a “soft hit,” meaning that the credit check will not affect the applicant’s credit.
How Much Does the Arkansas Cigarette Stamp Deputy Bond Cost?
The Arkansas Cigarette Stamp Deputy bond can cost between 2% to 10% of the bond amount per year. Monthly subscription options are also available. Insurance companies determine the rate based on several factors, including your customer’s credit score and experience. The chart below briefly references the approximate bond cost on the $10,000 requirement.
$10,000 Arkansas Cigarette Stamp Deputy Bond Cost
| Credit Score* | Bond Cost (1 Year) | Bond Cost (1 month) |
|---|---|---|
| 720+ | $100 | $10 |
| 680 – 719 | $150 | $15 |
| 650 -679 | $200 | $20 |
| 600 – 649 | $400 | $40 |
| 550 – 599 | $750 | $75 |
| 500 – 549 | $1,250 | $125 |
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to years of experience and underlying credit factors contained within the business owner’s credit report.
Who Is Required to Purchase an Arkansas Cigarette Stamp Deputy Bond?
The Secretary of the Arkansas Department of Finance and Administration appoints and commissions cigarette stamp deputies. Cigarette stamp deputies handle stamps and collect the tax on cigarettes before sales of cigarettes are made to the retailers. The potential candidate must purchase and maintain a Cigarette Stamp Deputy bond to qualify for such a position. In addition, the candidate must also meet the following mandates:
- Own a tobacco wholesaler or is an officer of a tobacco wholesaler
- Agree to certify each calendar quarter on a form prescribed by the Secretary that they will comply with all appointment requirements
- Consent to the jurisdiction of the State to enforce the requirements of the position and waives any claim of sovereign immunity to the contrary
- Provide complete and accurate reports
- If located outside of the State, has appointed a local agent to fulfill their duties
Appointment/Commission Period – The appointment and commission of a cigarette stamp deputy in Arkansas is one year.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
What Are the Insurance Requirements for Cigarette Stamp Deputies in Arkansas?
Arkansas does not require cigarette stamp deputies to purchase any form of liability insurance as a prerequisite to being commissioned. Cigarette stamp deputies must purchase and maintain a surety bond.
How Do Arkansas Cigarette Stamp Deputies File Their Bonds?
Arkansas cigarette stamp deputies should submit their completed bond forms to the applicable Department of Finance and Administration Revenue Office. The surety bond requires signatures from the surety company, as well as the cigarette stamp deputy. The surety company should include the following information on the bond form:
- The legal name of the individual buying the bond
- Surety company’s name
- Date the bond is signed
What Can Arkansas Cigarette Stamp Deputies Do to Avoid Claims Made Against Their Bonds?
The best way to avoid a claim against an Arkansas Cigarette Stamp Deputy bond is to fulfill all appointment and commission duties. This includes the collection of cigarette stamp tax payments and reporting.
What Other Insurance Products Can Agents Offer Cigarette Stamp Deputies in Arkansas?
Most reputable cigarette stamp deputies will purchase business liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Arkansas Cigarette Stamp Deputy Customers?
Arkansas conveniently provides a public database to search for active cigarette stamp deputies in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.