Arkansas Tobacco Vending Machine Operators Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain an Arkansas Tobacco Vending Machine Operators 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 tobacco vending machine operators in Arkansas
- Purpose: To ensure that the State of Arkansas will receive compensation for financial harm if the tobacco vending machine operator fails to pay all taxes and other fees due
- Who Regulates Tobacco Vending Machine Operators in Arkansas: The Arkansas Tobacco Control
Background
Arkansas Code Annotated 26-57-215A requires all tobacco vending machine operators operating in the state to obtain a permit from the Tobacco Control. The Arkansas Legislature enacted the permit requirement to ensure that tobacco vending machine operators do not engage in unethical business practices, as well as pay all related taxes and fees due. To provide financial security for the enforcement of the permit law, tobacco vending machine operators must purchase and maintain a surety bond to be eligible for licensure.
What Is the Purpose of the Arkansas Tobacco Vending Machine Operators Bond?
Arkansas Code Annotated 26-57-224 requires all tobacco vending machine operators to purchase a surety bond as part of the application process to obtain a permit. The bond ensures that restitution is available to the State of Alaska should the tobacco vending machine operator fail to abide by the regulations outlined in the Arkansas Tobacco Products Act of 1977. Specifically, the bond ensures that the State of Arkansas will receive compensation for financial harm if the tobacco vending machine operator fails to pay all taxes and other fees due. In short, the bond is a type of insurance that protects the State if the tobacco vending machine operator violates the terms of their permit.
How Can an Insurance Agent Obtain an Arkansas Tobacco Vending Machine Operators Bond?
BondExchange makes obtaining an Arkansas Tobacco Vending Machine Operators bond easy. Simply log in to your account and use our keyword search to find the “tobacco vending machine operators” 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.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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How Is the Bond Amount Determined?
According to Arkansas Code Annotated 26-57-224, the Tobacco Vending Machine Operators bond amount is based on how many machines the permittee is operating. See below for further details:
- Up to 30 machines – $2,000 bond limit required
- 31 to 60 machines – $3,000 bond limit required
- 61 to 90 machines – $4,000 bond limit required
- 91 to 120 machines – $5,000 bond limit required
- Over 120 machines – $6,000 bond limit required
Is a Credit Check Required for the Arkansas Tobacco Vending Machine Operators Bond?
Surety companies will run a credit check on the tobacco vending machine operator to determine eligibility and pricing for the Arkansas Tobacco Vending Machine Operators 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 Tobacco Vending Machine Operators Bond Cost?
Regardless of the varied bond limit, the Arkansas Tobacco Vending Machine Operators bond costs $100 per year or $10 a month.
Who Is Required to Purchase an Arkansas Tobacco Vending Machine Operators Bond?
Individuals and companies that operate tobacco, vapor, e-liquid, or any other alternative nicotine product vending machines in Arkansas must obtain a permit from the Tobacco Control, as well as a Tobacco Vending Machine Operators bond.
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.
How Do Tobacco Vending Machine Operators Obtain a Permit in Arkansas?
Tobacco vending machine operators in Arkansas must navigate several steps to obtain a permit. Below are the general guidelines, but applicants should refer to the Tobacco Control’s Rules and Regulations for details on the process.
Permit Period – Tobacco vending machine operator permits expire on June 30th each year.
Step 1 – Purchase Surety Bond
Tobacco vending machine operators must purchase and maintain a surety bond for the entirety of their permit period.
Step 2 – Complete Permit Application
A Vendor Permit Application must be completed and submitted to the Arkansas Tobacco Control. In addition, the following documents must be included:
- Color copies of the applicant’s driver’s license (applies to owners, partners, LLC members, and officers)
- Check or money order ($100 permit application fee)
- Copy of Sales and Use Tax Certificate
- Copy of Articles of Incorporation, Partnership Agreement, or Operating Agreement (if applicable)
- Copy of lease agreement, bill of sale, or purchasing agreement
- Itemized cigarette and tobacco inventory purchased from the previous owner (if applicable)
- Request for Vending Machine Permit Stamps Application
- Complete list of ALL vending locations
How Do Tobacco Vending Machine Operators in Arkansas Renew Their Permits?
Tobacco vending machine operator permits expire on June 30th, following the effective date of the permit issuance. A permit renewal application plus a renewal fee must be submitted to the Arkansas Tobacco Control on or before the expiration date.
What Are the Insurance Requirements for Tobacco Vending Machine Operators in Arkansas?
Arkansas does not require tobacco vending machine operators to purchase any form of liability insurance as a prerequisite to obtaining a permit. Tobacco vending machine operators must purchase and maintain a surety bond.
How Do Arkansas Tobacco Vending Machine Operators File Their Bonds?
Tobacco vending machine operators should submit their completed bond forms, including the power of attorney, when submitting their permit applications to the Arkansas Tobacco Control (see the mailing address listed below).
Arkansas Tobacco Control
101 East Capitol Ave., Suite 401
Little Rock, AR 72201
The surety bond requires signatures from the surety company, as well as the tobacco vending machine operator. 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 Tobacco Vending Machine Operators Do to Avoid Claims Made Against Their Bonds?
The best way to avoid a claim against an Arkansas Tobacco Vending Machine Operators bond is to follow all permit rules and regulations, specifically paying all taxes and other fees due to the Tobacco Control.
What Other Insurance Products Can Agents Offer Tobacco Vending Machine Operators in Arkansas?
Most reputable tobacco vending machine operators 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 Tobacco Vending Machine Operator Customers?
Arkansas conveniently provides a public database to search for active tobacco vending machine operators 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.