Current through September 2, 2024
Section 63-2428, Idaho Code
01.
Exemption to Bond Requirements for Licensed Distributors. Bonds are required of all licensed distributors unless the distributor is found to be financially responsible. A licensed distributor seeking exemption from the bonding requirement must apply for the exemption by filing a written petition with the Tax Commission. The petition must contain information relating to the requirements of Section 63-2428, Idaho Code, for establishing financial solvency and responsibility. Together with the petition, the distributor must submit any information required in the following Subsections 310.01.a. through 310.01.e.
a. If all or any part of the unencumbered property offered to show financial solvency is real property, the petition must include both 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 a copy of the most recent valuation notice issued by the county assessor for ad valorem property tax purposes.
b. If all or any part of the unencumbered property is licensed motor vehicles, the petition must include copies of the titles of the vehicles and evidence of the value of the vehicles from a source independent from the distributor.
c. If all or any part of the unencumbered property is personal property other than motor vehicles, the petition must 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 of 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 required to establish that no security interests or other encumbrances exist.
d. The petitioner must 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 must 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 must be accompanied by an opinion issued by an independent certified public accountant and a responsible company officer must 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 must be reviewed by a certified public accountant or licensed public accountant and a responsible company officer must also certify that the financial statements provided present fairly the financial position of the company.
e. The Tax Commission may require the distributor to supplement its petition with such further information as the Tax Commission, in its discretion, finds necessary to determine financial responsibility. If incomplete or substitute submissions are received by the Tax Commission, the information submitted is reviewed on a case-by-case basis to determine whether an exemption from the bonding requirement is granted.
02.
Conditions for Termination of Exemption. If granted, the exemption from the bonding requirement will terminate:
a. One (1) year after the date on which it was granted.
b. Ninety (90) days after the occurrence of any delinquency in motor fuels tax unless the delinquency has been paid within that time period.
c. Upon the occurrence of any encumbrance of any of the property upon which the finding of financial responsibility was based.
d. Upon the occurrence of any change in the business activity of the distributor that would cause the amount of bond required to be increased to an amount greater than the value of the distributor's unencumbered assets.
e. Upon the occurrence of any event prejudicing the distributor's solvency or financial responsibility.
03.
Bond Requirement upon Termination of 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.
04.
Pending Application Does Not Excuse the Bond Requirement. Having an application pending for exemption from the requirement for a bond does not excuse the bond. If a bond exemption is due to expire, the distributor must 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 must meet all of the requirements of this rule.
05.
Conditions for Renewal of Bond Exemption. The following must be submitted to renew a bond exemption:
a. A written request for renewal of waiver;
b. The information required in Subsections 310.01.a. through 310.01.e. of this rule.
Effective March 31, 2022
