Idaho State Tax Commission

Fuel Tax Bonding Options

This page explains bonding requirements for Idaho fuels distributors. The Tax Commission reviews all bonds annually.

Estimate your first year's bond

Use this formula to estimate your first year's bond:

  1. For each fuel type, multiply your average number of gallons per month by the tax rate below.

  • Aviation   $0.07
  • Diesel   $0.32
  • Gasoline   $0.32
  • Jet   $0.06
  • Compressed natural gas   $0.32/GGE
  • Liquefied natural gas   $0.349/DGE
  • Propane   $0.232

  1. Total the estimated tax you would owe for all tax types.
  2. Multiply the result of that calculation by 2.

Five choices for bonding

Surety Bond

To set up a surety bond, call your insurance company. You must make sure the following information is included on the bond:

  • Bond number
  • Principal
  • Payable to the Idaho State Tax Commission
  • Minimum of $1,000
  • For the purpose of a "Fuel Distributor Tax Permit"
  • Cancellation procedure
  • Notarized

Cash Bond

A cash bond is a cashier's check, money order, or other certified funds made out to the Idaho State Tax Commission. It won't accrue interest. We'll hold the money as long as you have your fuel distributor license.

The bond must be in the name of the Idaho State Tax Commission and the original documents must come to our office.

Certificate of Deposit (CD)

The interest accrued on the CD will go to you. If your bank holds the actual CD or doesn't issue a certificate, call (208) 334-7781 for a copy of the Certificate of Deposit for Fuel Bond form.

Joint Savings Account

The interest accrued on a joint savings account will go to you. Call (208) 334-7781 for a copy of the Joint Savings Account for Fuel Bond form.

Irrevocable (Standby) Letter of Credit (ILC)

This is issued by a bank doing business in Idaho. It must include the following items:

  • Issuing institution
  • Licensee's name
  • Effective date
  • Expiration time and place
  • Payable to the Idaho State Tax Commission
  • Dollar amount covered
  • Terms of the letter
  • Letter number
  • Authorized signatures

If you have questions

If you have questions, please call (208) 334-7781.

Sept. 9, 2015

This information is for general guidance only. Tax laws are complex and change regularly. We can't cover every circumstance in our guides. This guidance may not apply to your situation. Please contact us with any questions. We work to provide current and accurate information. But some information could have technical inaccuracies or typographical errors. If there's a conflict between current tax law and this information, current tax law will govern.