Georgia Cigar, Cigarette, and Vapor Products Distributor Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain a Georgia Cigar, Cigarette, and Vapor Products Distributor 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 cigar, cigarette, and vapor product distributors operating in Georgia
• Purpose: To ensure that the Georgia Department of Revenue will receive compensation for financial harm if the licensee fails to pay all required taxes
• Who Regulates Cigar, Cigarette, and Vapor Product Distributors in Georgia: The Georgia Department of Revenue

Background

Code of Georgia Annotated 48-11-4 requires cigar, cigarette, and vapor product distributors operating in the state to obtain a license from the Department of Revenue. The Georgia Legislature enacted the licensing requirement to ensure that distributors do not engage in unethical business practices. To provide financial security for the enforcement of the licensing law, distributors must purchase and maintain a surety bond to be eligible for licensure.

What Is the Purpose of the Georgia Cigar, Cigarette, and Vapor Products Distributor Bond?

Code of Georgia Annotated 48-11-4 and 48-11-7 require all cigar, cigarette, and vapor product distributors to purchase a surety bond as part of the application process to obtain a license. The bond ensures that restitution is available to the Department of Revenue should the distributor fail to abide by the regulations outlined in the Code of Georgia Annotated Title 48, Chapter 11. Specifically, the bond ensures that the Department will receive compensation for financial harm if the licensee fails to pay all required taxes and fees. In short, the bond is a type of insurance that protects the Department if the distributor violates the terms of their license.

How Can an Insurance Agent Obtain a Georgia Cigar, Cigarette, and Vapor Products Distributor Bond?

BondExchange makes obtaining a Georgia Cigar, Cigarette, and Vapor Products Distributor bond easy. Simply log in to your account and use our keyword search to find the “cigar, cigarette, vapor products distributor” 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 the Georgia Department of Revenue, the Cigar, Cigarette, and Vapor Products Distributor bond amount for new applicants is $5,000. Distributors that are renewing their licenses must obtain a bond amount equal to $1,000 or 1% of the gross tobacco sales of the distributor (whichever is greater).

Is a Credit Check Required for the Georgia Cigar, Cigarette, and Vapor Products Distributor Bond?

Surety companies will run a credit check on the distributor to determine eligibility and pricing for the Georgia Cigar, Cigarette, and Vapor Products Distributor 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 Georgia Cigar, Cigarette, and Vapor Products Distributor Bond Cost?

The Georgia Cigar, Cigarette, and Vapor Products Distributor 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 if you were seeking a $10,000 bond limit.

$10,000 Georgia Cigar, Cigarette, and Vapor Products Distributor Bond Cost

*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 Georgia Cigar, Cigarette, and Vapor Products Distributor Bond?

According to the Code of Georgia Annotated 48-11-4 and 48-11-7, distributors of cigars, cigarettes, and other vapor products within the State of Georgia are required to purchase and maintain the Cigar, Cigarette, and Vapor Products Distributor bond for the entirety of their license period.

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 Cigar, Cigarette, and Vapor Product Distributors Obtain a License in Georgia?

Cigar, cigarette, and vapor product distributors in Georgia must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the Department of Revenue’s Licensing requirements for details on the process.

License Period – Cigar, cigarette, and vapor products distributor licenses in Georgia expire one year from the initial activation date.

Step 1 – Purchase Surety Bond

Cigar, cigarette, and vapor product distributors operating in the State of Georgia must purchase and maintain a surety bond for the entirety of their license period. In addition, a Tobacco Distributor Tax Stamp bond is mandated (if applicable).

Step 2 – Complete License Application

Applicants must submit a completed license application through the online Georgia Tax Center. In addition, the following requirements/documents must be attached:

• Scanned copy of the current annual registration from the GA Secretary of State
• List of products to be sold
• Scanned copy of local license
• Scanned copy of warehouse lease/deed
• Notarized ATT-17 Georgia Alcohol & Tobacco Personnel Statement
• A notarized financial affidavit
• Power of Attorney (if applicable)
• Citizenship Affidavit along with secure and verifiable documents (i.e., a government-issued photo ID)
• Tobacco Distributors Tax Stamp Bond (if applicable)
• Application fee of $250

How Do Cigar, Cigarette, and Vapor Product Distributors Renew Their Georgia Licenses?

Cigar, cigarette, and vapor product distributor licenses in Georgia expire one year from the initial activation date. License renewals must be completed through the Department of Revenue’s online Georgia Tax Center. Renewal application fees may apply.

What Are the Insurance Requirements for Cigar, Cigarette, and Vapor Product Distributors in Georgia?

Georgia does not require cigar, cigarette, and vapor product distributors to purchase any form of liability insurance as a prerequisite to obtaining a license. Cigar, cigarette, and vapor product distributors must purchase and maintain a surety bond.

How Do Georgia Cigar, Cigarette, and Vapor Product Distributors File Their Bonds?

Cigar, cigarette, and vapor product distributors in Georgia should electronically submit their completed bond forms, including a power of attorney, when submitting their license applications. The surety bond requires signatures from the surety company and the distributor. 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 Georgia Cigar, Cigarette, and Vapor Product Distributors Do to Avoid Claims Made Against Their Bonds?

The best way to avoid a claim against a Georgia Cigar, Cigarette, and Vapor Products Distributor bond is to pay all related fees, taxes, penalties, and interest that are due to the Department of Revenue in full and on time.

What Other Insurance Products Can Agents Offer Cigar, Cigarette, and Vapor Product Distributors in Georgia?

Most reputable cigar, cigarette, and vapor product distributors 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 Georgia Cigar, Cigarette, and Vapor Product Distributor Customers?

Georgia conveniently provides a public database to search for active cigar, cigarette, and vapor product distributors 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.