Florida Stamping Distributor – Cash (Cigarettes) Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Florida Stamping Distributor – Cash (Cigarettes) 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 stamping agents operating in Florida
- Who Regulates Cigarette Stamping Agents in Florida: The Florida Department of Business and Professional Regulation (DBPR)
- Purpose: To ensure that the FDBPR will receive compensation for financial harm if the cigarette stamping agent fails to pay all required taxes
Background
Florida Administrative Code 61A-10.0021 requires all cigarette stamping agents operating in the state to first obtain a permit from the Department of Business and Professional Regulation as a wholesale dealer. The Florida Legislature enacted the permit requirement to ensure that cigarette stamping agents do not engage in unethical business practices. To provide additional financial security for the enforcement of the position’s requirements, cigarette stamping agents must purchase and maintain a surety bond.
What Is the Purpose of the Florida Stamping Distributor – Cash (Cigarettes) Bond?
Florida Administrative Code 61A-10.0021 requires all cigarette stamping agent applicants to first purchase a surety bond as part of the application process. The bond ensures that restitution is available to the Department of Business and Professional Regulation should the cigarette stamping agent fail to abide by the regulations outlined in the Florida Administrative Code Chapter 61A-10. Specifically, the bond ensures that the FDBPR will receive compensation for financial harm if the cigarette stamping agent fails to pay all required taxes and fees due. In short, the bond is a type of insurance that protects the FDBPR if the cigarette stamping agent violates the terms of their position.
How Can an Insurance Agent Obtain a Florida Stamping Distributor – Cash (Cigarettes) Bond?
BondExchange makes obtaining a Florida Stamping Distributor – Cash (Cigarettes) bond easy. Simply log in to your account and use our keyword search to find the “cigarette stamping agent” 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 Florida Administrative Code 61A-10.0021, the Stamping Distributor – Cash (Cigarettes) bond limit must be in an amount equal to 110% of the estimated tax liability of the permittee for 30 days. A minimum bond limit of $2,000 is required. The Cigarette Tax Division will determine the estimated monthly tax liability based on the packs of unstamped cigarettes purchased for resale within the state, for which the stamps have been purchased on credit in lieu of cash payment by the cigarette stamping agent.
Is a Credit Check Required for the Florida Stamping Distributor – Cash (Cigarettes) Bond?
Surety companies will run a credit check on the cigarette stamping agent to determine eligibility and pricing for the Florida Stamping Distributor – Cash (Cigarettes) bond. Applicants with excellent credit and work experience can expect to receive the best rates. Applicants with poor credit may be declined by some surety companies 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 Florida Stamping Distributor – Cash (Cigarettes) Bond Cost?
The Florida Stamping Distributor – Cash (Cigarettes) bond can cost between 2% and 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 Florida Stamping Distributor – Cash (Cigarettes) 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 Obtain a Florida Stamping Distributor – Cash (Cigarettes) Bond?
According to Florida Administrative Code 61A-10.0021, permitted wholesale dealers that the Florida Department of Business and Professional Regulation, Cigarette Tax Division has authorized as a stamping agent to affix stamps to packages of cigarettes must purchase and maintain a Stamping Distributor – Cash (Cigarettes) bond for the entirety of their operation.
In addition, the following documents/requirements must be submitted to the Division prior to authorization:
- A letter from the permitted wholesale dealer requesting to be a stamping agent
- A letter from cigarette manufacturers and importers stating that they will ship to the applicant directly
- If licensed as a stamping agent by another state, authorization from that state to purchase and affix that state’s tax indicia within the State of Florida
Upon the expiration of the agent’s Stamping Distributor – Cash (Cigarettes) bond, a continuation certificate for the bond must be sent to the Division. Failure to renew the surety bond or cancellation must result in the stamping agent ceasing operations immediately.
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 Stamping Agents in Florida?
Florida does not require cigarette stamping agents to purchase any form of liability insurance as a prerequisite to obtaining a permit. Cigarette stamping agents must purchase and maintain a surety bond.
How Do Florida Cigarette Stamping Agents File Their Bonds?
Cigarette stamping agents in Florida should submit their completed bond forms, including the power of attorney, electronically through the DBPR Online Services portal. The surety bond requires signatures from the surety company and the cigarette stamping agent. The surety company should include the following information on the bond form:
- Legal name and address of the individual buying the bond
- Surety company’s name
- Date the bond is signed
What Can Florida Cigarette Stamping Agents Do to Avoid Claims Made Against Their Bonds?
The best way to avoid a claim against a Florida Stamping Distributor – Cash (Cigarettes) bond is to pay all cigarette stamp taxes, penalties, and interest that are due to the Department of Business and Professional Regulation in full and on time.
What Other Insurance Products Can Agents Offer Cigarette Stamping Agents in Florida?
Most reputable cigarette stamping agents 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 Florida Cigarette Stamping Agent Customers?
Florida conveniently provides a public database to search for active cigarette stamping agents 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.
