Birmingham Transient Dealer Bond: A Comprehensive Guide

November 24, 2021

Birmingham Transient Dealer Bond

This guide provides information for insurance agents to help their customers obtain Birmingham Transient Dealer Bonds

At a Glance:

  • Average Cost: $100
  • Bond Amount: $5,000 or 10% of all projected sales, whichever is greater
  • Who Needs it: All transient merchants operating in Birmingham
  • Purpose: To ensure the city will receive compensation for any damages should the transient dealer fail to pay all required taxes
  • Who Regulates Dealers in Birmingham: The Birmingham Tax and License Division

Background

The City of Birmingham requires all transient dealers operating in the city to obtain a license with the Tax and License Division. The City of Birmingham enacted the licensing requirement to ensure that transient dealers are in compliance with all applicable ordinances. To provide financial security for the enforcement of the licensing law, transient dealers must purchase and maintain a surety bond to be eligible for licensure.

What is the Purpose of the Birmingham Transient Dealer Surety Bond?

Birmingham requires transient dealers to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the city will receive compensation for financial harm if the transient dealer fails to comply with licensing law. Specifically, the bond protects the public in the event the transient dealer fails to pay all taxes owed to the city. In short, the bond is a type of insurance that protects the public if the transient dealer breaks licensing laws.

Birmingham Transient Dealer Bond Form

Birmingham Transient Dealer Bond Form

How Can an Insurance Agent Obtain a Birmingham Transient Dealer Bond?

BondExchange makes obtaining a Birmingham Transient Dealer surety bond easy. Simply log in to your account and use our keyword search to find the “transient” 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 at (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.

Is a Credit Check Required for the Birmingham Transient Dealer Bond?

No, a credit check is not required for the Birmingham Transient Dealer bond. Because the bond is considered relatively low risk, the same low rate is offered to all transient dealers in Birmingham regardless of their credit history.

How Much Does the Birmingham Transient Dealer Bond Cost?

The Birmingham Transient Dealer bond costs just $100.

How Does Birmingham Define “Transient Dealer?”

The City of Birmingham defines a transient dealer as any individual or business entity who sells any type of merchandise in the city for a period of no longer than 180 days. Vendors who sell goods at trade shows, festivals, and fairs are considered transient dealers.

How do Transient Dealers Apply for a License in Birmingham?

Transient dealers in Birmingham must navigate several steps to secure their licenses. Below are the general guidelines, but applicants should refer to the application packet for details on the process.

License Period – The Birmingham Transient Dealer License does not expire, however, dealers will need to obtain a new license each time they plan to operate within the city

Step 1 – Purchase a Surety Bond

Transient dealers must purchase and maintain a surety bond with a limit of $5,000 or 10% of the dealer’s total projected sales, whichever is greater

Step 2 – Complete the Application

All Birmingham Transient Dealer License applications should be mailed to the following address:

City of Birmingham
Revenue Division
Room TL-100, City Hall
710 North 20th ST
Birmingham, AL 35203

Transient Dealers must complete the application in its entirety, and submit the following deposits:

    • Sales tax deposit equaling $3,000 or 3% of the anticipated sales, whichever is greater
    • Occupational tax deposit $50 or 1% of the anticipated compensation that will be paid to employees

Dealers must pay a licensing fee based on their anticipated sales, as referenced in the table below:

Anticipated Sales Licensing Fee
$10,000 or less $200
More than $10,000 but less than $25,000 $400
More than $25,000 but less than $50,000 $600
More than $50,000 but less than $100,000 $800
More than $100,000 $1,000

Do Birmingham Transient Dealers Need to Renew Their License?

The Birmingham Transient Dealer License does not expire, however, dealers will need to obtain a new license each time they plan to operate within the city.

What are the Insurance Requirements for the Birmingham Transient Dealer License?

The City of Birmingham does not require transient dealers to obtain any sort of liability insurance as a prerequisite to obtaining a business license. Transient dealers must purchase and maintain a surety bond with a limit of $5,000 or 10% of the dealer’s total projected sales, whichever is greater.

How Do Birmingham Transient Dealers File Their Bond?

Transient dealers should mail their completed bond form, including the power of attorney, to the following address:

City of Birmingham
Revenue Division
Room TL-100, City Hall
710 North 20th ST
Birmingham, AL 35203

The Transient Dealer surety bond requires signatures from both the surety company that issues the bond and the transient dealer. The surety company should include the following information on the bond form:

  • Legal name of entity/individual(s) buying the bond
  • Surety company’s name and state of incorporation
  • Bond amount
  • Date the bond is signed
  • Date the bond goes into effect

What Can Birmingham Transient Dealers Do to Avoid Claims Against Their Bond?

To avoid claims on their bond, Transient Dealers in Birmingham must ensure that they pay all taxes owed to the city.

What Other Insurance Products Can Agents Offer Transient Dealers in Birmingham?

Birmingham does not require transient dealers to purchase any form of liability insurance as a prerequisite to obtaining a business license. However, most reputable dealers will seek to purchase this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability 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 Birmingham Transient Merchant Customers?

Birmingham unfortunately does not provide a public database to search for active transient dealers in the city. We suggest contacting the city directly to obtain this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

2021-12-28T15:17:06-05:00