Louisiana Tobacco Tax Bond: Amount, Cost, and Filing

A Louisiana tobacco tax bond is a surety bond that every registered tobacco dealer must file with the Department of Revenue before selling cigarettes, cigars, or smoking tobacco in the state. The statutory minimum is $2,500, but the secretary of revenue can require a larger bond based on the volume of your business.¹ The bond guarantees that Louisiana can recover unpaid tobacco taxes and penalties from you, and it is a condition of getting and keeping your tobacco permit.

Who Has to Post the Bond

The bond requirement under R.S. 47:848 applies to every registered tobacco dealer handling cigars, cigarettes, and smoking tobacco.¹ In practice, wholesale dealers feel it most, because they are the ones buying tax stamps and remitting excise taxes directly to the state. The Department of Revenue requires that anyone who sells or is about to sell cigarettes, cigars, or other tobacco products at wholesale obtain the proper permit before beginning business.²

A wholesale dealer permit costs $75 per year for each wholesale location and expires on December 31. You cannot get or renew that permit without a valid bond on file.²

How the Bond Amount Is Set

The statute floor is $2,500. The actual amount the secretary of revenue requires depends on the volume of your business and the tax exposure it creates, and must be sufficient to protect the state against losses from unpaid taxes and penalties.¹ A small dealer with modest inventory may stay near the minimum. A high-volume distributor buying large quantities of tax stamps will be assigned a substantially higher bond.

The Department of Revenue’s own guidance echoes the statute: the bond must be “an amount that is satisfactory to the Secretary based on the volume of the dealer’s business.”³ If you expand operations or add product lines, expect your bond amount to be reassessed.

What the Bond Costs You

You do not pay the full bond amount. You pay an annual premium to a surety company, usually a percentage of the bond’s penal sum. For most license and permit bonds under $50,000, personal credit is the biggest pricing factor:

Strong credit (675+): roughly 1% to 3% of the bond amount.
Average credit (600–675): roughly 3% to 5%.
Poor credit (below 600): roughly 5% to 10%.

On a $2,500 minimum bond, even the top of that range is modest. If the secretary sets your bond at $25,000 or $50,000 because of volume, the premium becomes a real recurring cost. Business financials, years in operation, and the bond term can also move the rate.

How to File the Bond

The bond is filed on Form R-10100, the official Tobacco Tax Surety Bond form from the Louisiana Department of Revenue. Do not confuse it with Form R-5604, which is the monthly tobacco tax return.⁴ The form calls for:

Principal information: dealer’s legal name (individual, partnership, or corporation), trade name, principal business address, mailing address, ownership type, and state of incorporation if applicable.
Surety information: the surety company’s legal name, home office address, and mailing address.
Bond amount: the penal sum in dollars, at least $2,500.
Effective date of the bond.
Signatures of both the principal and the surety company representative, each with two witnesses.

The surety executing the bond must be authorized to do business in Louisiana, and most sureties will attach a Power of Attorney verifying their representative’s signing authority.⁵

Mail the fully executed original to:

Taxpayer Compliance – SSEW
P.O. Box 66362
Baton Rouge, LA 70896-6362⁵

Unlike the tax return, which must be filed electronically through LaTAP, the bond itself is submitted as a physical document by mail.⁴ Once the Department of Revenue confirms the bond is legally valid and the surety is qualified, the permit can be issued or renewed.

How Long the Bond Lasts

The Louisiana tobacco tax bond is a continuing bond with no fixed expiration date. It stays in force from the effective date until either the principal or the surety terminates it. Either party can cancel by giving 30 days’ written notice to the other, and that notice must also be filed with the secretary of revenue.⁵

Cancellation does not wipe out past liability. After the 30-day notice period runs, the surety remains responsible for claims arising from the period the bond was active. If your surety cancels, you have that 30 days to put a replacement bond on file. Miss that window and your permit cannot stay valid.

Because the wholesale dealer permit expires on December 31 each year, coordinate bond maintenance with permit renewal. A lapsed bond at renewal time means the Department of Revenue will not reissue your permit.²

What Happens If a Claim Is Filed

If you fail to pay tobacco taxes or penalties, the state can file a claim against your bond. Louisiana law expressly authorizes the secretary of revenue to “proceed to effect collection through the taxpayer’s bonding company” when a dealer fails to pay tax due on stamp purchases after written demand.⁶

The surety pays the state. That does not end your exposure. Under the indemnity agreement you signed when the bond was issued, you are personally obligated to reimburse the surety for every dollar it paid out, plus legal costs and expenses the surety incurred handling the claim. If you refuse, the surety can sue you, and most indemnity agreements tilt the burden of proof in the surety’s favor. The bond protects the state, not you. You are the one who ultimately pays.

Penalties for Operating Without a Valid Bond

No valid bond means no valid permit, and every sale you make without that permit is illegal. On top of that, Louisiana imposes specific financial penalties on wholesale dealers who fall behind on tax obligations:

Loss of the stamp discount. Wholesale dealers who buy tax stamps on credit receive a discount; failing to file returns or pay taxes on time forfeits it entirely.
Late penalties of 5% on the tax due for delinquencies of 10 days or less, jumping to 20% beyond 10 days, plus interest.
Accelerated collection. If you fail to pay after the secretary sends a written demand by certified mail, all outstanding credit purchases of tobacco stamps become immediately due, whether individually delinquent or not. Payment must then be made by cashier’s check, certified check, or cash.

The secretary can also pursue collection directly through your bonding company, which triggers the indemnity process described above.⁶ The costs compound quickly, which is why keeping the bond active and staying current on filings matters far more than the modest premium suggests.

Waiver for Established Dealers

Louisiana law lets the secretary of revenue waive the bond requirement entirely, but qualifying is narrow. You must meet all three conditions:

Fixed assets in Louisiana with a net value of at least 1.25 times the bond amount that would otherwise be required.
A bond on file with the Department of Revenue for at least three consecutive years.
No delinquency on any tobacco taxes during the three years immediately before the waiver application.

You submit audited financial statements with the waiver request, and the secretary can demand updated statements at any point. If you later become delinquent, the secretary can revoke the waiver and require a new bond, and you become ineligible for another waiver for three years.¹

1
Justia. Louisiana Code 47:848 – Tobacco Dealers Required to Furnish Bond; Waiver
2
Louisiana Department of Revenue. Tobacco Products Permits
3
Louisiana Department of Revenue. Tobacco Tax
4
Louisiana Department of Revenue. Instructions for Louisiana Tobacco Tax Return (Form R-5604)
5
Louisiana Department of Revenue. Tobacco Tax Surety Bond
6
Louisiana State Legislature. Louisiana Revised Statutes 47:843