Exemption From Tax Bond

Section 63-2428, Idaho Code 01. Bond Exemption for Licensed Distributors. Bonds are mandatory for all licensed distributors unless the distributor is found to be financially responsible. A licensed distributor seeking exemption from bonding may apply for the exemption by filing a written petition with the Tax Commission. The petition will contain information defined in Section 63-2428, Idaho Code, for establishing financial solvency and responsibility. Together with the petition, the distributor will submit information detailed as follows: (7-1-25) a. If all or any part of the unencumbered property offered to show financial solvency is real property, the petition will include both: (7-1-25) i. A title report from an independent title company reporting on the state of the title of the real property as of a time not more than fifteen (15) days before the filing of the petition, and (7-1-25) ii. A copy of the most recent valuation notice issued by the county assessor for ad valorem property tax purposes. (7-1-25) b. If all or any part of the unencumbered property is licensed motor vehicles, the petition will include copies of the titles of the vehicles and evidence of the value of the vehicles from a source independent from the distributor. (7-1-25) c. If all or any part of the unencumbered property is personal property other than motor vehicles, the petition will include a description of the property, evidence of ownership of the property, an independent appraisal of the property, and evidence that the property is unencumbered. Copies of all documents relating to all the distributor’s current and long-term liabilities, including contingent liabilities, lawsuits or potential lawsuits to which the distributor is or may become a party, are needed to establish that no security interests or other encumbrances exist. (7-1-25) d. The petitioner will arrange, at the petitioner’s expense, for an established, independent commercial credit rating company to submit directly to the Tax Commission a current and complete credit report about the licensed distributor; or the distributor will include with the petition its most recent financial statements, including a current income statement, balance sheet, and statement of cash flows. If the petitioner is a publicly held company, the financial statements are to be accompanied by an opinion issued by an independent certified public accountant. A responsible company officer will also certify that the financial statements provided present fairly the financial position of the company. If the petitioner is a privately held company, the financial statements will be reviewed by a certified public accountant, and a responsible company officer will certify that the financial statements provided present fairly the financial position of the company. (7-1-25) e. The Tax Commission may request the distributor supplement its petition with further information to determine financial responsibility. If the Tax Commission receives incomplete or substitute information, the IDAHO ADMINISTRATIVE CODE IDAPA 35.01.05 State Tax Commission Idaho Motor Fuels Tax Administrative Rules Section 311 Page 14 submissions are reviewed on a case-by-case basis to determine whether a bond exemption is granted. (7-1-25) 02. Conditions for Termination of Exemption. If granted, the exemption from bonding will terminate: (7-1-25) a. One (1) year after the date on which it was granted. (3-31-22) b. Ninety (90) days after the occurrence of any delinquency in motor fuels tax unless the delinquency has been paid within that time period. (3-31-22) c. Upon the occurrence of any encumbrance to the property upon which the finding of financial responsibility was based. (7-1-25) d. Upon the occurrence of any change in the business activity of the distributor that would cause the amount of bond to be increased to an amount greater than the value of the distributor’s unencumbered assets. (7-1-25) e. Upon the occurrence of any event prejudicing the distributor’s solvency or financial responsibility. (3-31-22) 03. Upon Termination of a Bond Exemption. Immediately upon any termination of the exemption from the requirement for a bond the distributor must supply the required bond according to Section 63-2428, Idaho Code. (7-1-25) 04. Pending Bond Exemption Application. Having an application pending for a bond exemption does not excuse the bond. If a bond exemption is due to expire, the distributor is obligated to submit a new petition applying for a continuation of the exemption no later than ninety (90) days before the day the exemption is due to expire to prevent a lapse in the exemption. The petition has to meet all the conditions of this rule. (7-1-25) 05. Conditions for Renewal of Bond Exemption. The following is necessary to renew a bond exemption: (7-1-25) a. A written request for renewal of waiver; and (7-1-25) b. The information required in Subsections 310.01.a. through 310.01.e. of this rule. (3-31-22)