The Kentucky Watercraft Refund Bond is a $1,000 bond used in connection with Kentucky motor fuels tax refunds for certain liquid fuel sold for use in watercraft. The form applies to a principal that is engaged in, or preparing to engage in, selling liquid fuel for watercraft and that may apply to the Commonwealth of Kentucky for refunds of tax paid on qualifying fuel. The bond is intended to secure the principal’s compliance with Kentucky Revised Statute 138.445 and the repayment of any refund that the principal was not entitled to receive. The bond involves both the principal and a surety, and it remains effective unless its conditions are satisfied or it is properly terminated under the terms stated on the form.
Who Should Complete This Form?
This form is intended for a business or other principal involved in selling liquid fuel for the operation of watercraft when the operation is connected with claims for refunds of Kentucky tax paid on that fuel.
The form specifically describes fuel purchased by a public boat dock operator or another dispensing facility that floats on the water and sells the fuel for use in watercraft.
The form also requires participation by a surety, because the principal and surety become obligated to the Commonwealth of Kentucky under the $1,000 bond.
How To File the Kentucky Watercraft Refund Bond
After the form has been fully completed and properly executed, return it to:
Department of Revenue
Motor Fuels Tax Compliance Section
Frankfort, Kentucky 40620
The form does not identify another tax return or separate form that must be attached to it, so do not assume an attachment is required unless separate Department of Revenue instructions for your situation say otherwise.
Before completing the bond, prepare the following information:
- Assigned bond number
- Bond effective date
- Legal name of the principal
- Principal’s street address or P.O. Box
- Principal’s city, state, and ZIP code
- Name of the surety
- Address of the surety
- Date the bond is executed
- Authorized owner or president information
- Surety execution information
- Attorney-in-fact information
- Kentucky resident agent information, when applicable
Because this is a bond document, names and addresses should be entered consistently throughout the form.
How To Complete the Watercraft Refund Bond
Bond Identification
Bond Number
Enter the bond number assigned to this bond.
Use the exact identifying number associated with the bond. If a bond number has not yet been provided, confirm the correct number before submitting the document rather than creating one yourself.
Effective Date
Enter the date on which the bond becomes effective.
Make sure the effective date agrees with the bond arrangement being provided for the principal.
Principal Information
Name of Principal
Enter the full legal name of the person, business, or organization serving as the principal under the bond.
This should be the entity engaged in, or preparing to engage in, the watercraft fuel activity covered by the bond.
Use the same legal name consistently in the execution and signature portions of the document.
Street or P.O. Box
Enter the principal’s mailing address.
Use either the applicable street address or post office box.
City
Enter the city associated with the principal’s address.
State and ZIP Code
Enter the state and ZIP code for the principal’s address.
Review the full principal address before continuing to make sure all parts of the address belong to the same business or individual.
Surety Information
Name of Surety
Enter the full legal name of the surety providing the bond.
The surety is the party that joins the principal in the obligation to the Commonwealth of Kentucky.
Address of Surety
Enter the surety’s complete address in the space provided.
The form establishes a $1,000 obligation involving the principal and surety for compliance with the applicable Kentucky statute.
Understanding the $1,000 Bond Obligation
The form states that the principal and surety are bound to the Commonwealth of Kentucky in the amount of $1,000.
The purpose of that obligation is to support the principal’s prompt and faithful compliance with Kentucky Revised Statute 138.445.
The bond language also binds the applicable heirs, executors, administrators, successors, and assigns and describes the obligation as joint and several.
In practical terms, this section establishes the legal obligation created by the bond. It is not an amount that should be recalculated or changed in one of the blank fields.
Understanding the Watercraft Fuel Refund Condition
The bond explains why the obligation is required.
The principal is described as being engaged in, or preparing to engage in, selling liquid fuel for the operation of watercraft.
The form further addresses situations involving tax paid on liquid fuel purchased by a public boat dock operator or another fuel-dispensing facility that floats on the water, where the fuel is sold for use in operating watercraft.
The principal may periodically apply to the Commonwealth of Kentucky for refunds of taxes paid on this type of fuel.
There is no blank to complete inside this paragraph. Instead, review the language carefully to make sure it describes the activity for which the bond is being provided.
Conditions for Satisfying the Bond
The bond remains tied to two important obligations.
First, the principal must comply with the provisions of Kentucky Revised Statute 138.445.
Second, the principal must repay the Commonwealth of Kentucky for any refund received when the principal was not entitled to that refund.
If those obligations are properly fulfilled, the form provides that the bond obligation becomes void. Otherwise, the bond remains in effect subject to its stated terms.
There is no amount or checkbox to enter in this section. It explains the conditions accepted by the parties signing the bond.
Termination by the Surety
The form permits the surety to terminate the bond by giving written notice to both:
- The Department of Revenue
- The principal
The notice must be sent by registered mail at least 60 days in advance.
This is an important condition of the bond rather than a field that must be completed when initially filing the form.
Bond Execution and Signature Section
After reviewing the bond conditions, complete the execution date and required signature areas.
Execution Date
Day
Enter the numerical day on which the bond is being executed.
For example, if the bond is signed on April 15, enter 15 in the day space.
Month
Enter the month in which the bond is executed.
Year
Enter the appropriate year after the preprinted “20” portion.
The completed information should identify the actual date the parties execute the bond.
Principal Execution
By — Owner or President
The form provides a signature line identified for the Owner or President.
The appropriate owner or president of the principal should complete the line as required to execute the bond on behalf of the principal.
The person signing should have authority to act for the principal.
Surety Execution
Surety
Complete the line labeled Surety so that it corresponds with the surety identified earlier in the form.
Make sure the surety information is consistent throughout the bond.
By — Attorney-in-Fact
The form provides a separate “By” signature line for the surety’s Attorney-in-Fact.
The appropriate attorney-in-fact should complete this area when the bond is executed through that representative.
Kentucky Resident Agent of Surety Company
The form also contains a line identified for the Kentucky Resident Agent of Surety Company.
Complete this field when applicable to the surety’s execution of the bond.
Because the form uses the wording “and/or,” the applicable surety representative information should be completed according to the surety arrangement.
Address of Kentucky Resident Agent
Enter the address of the Kentucky resident agent in this field when resident-agent information is being provided.
Review the address carefully for completeness before submitting the bond.
Where To Return the Completed Form
Send the completed bond to the destination stated on the form:
Department of Revenue
Motor Fuels Tax Compliance Section
Frankfort, Kentucky 40620
Before sending it, verify that the principal and surety sections have been completed and that all required execution information is present.
Department Use Only Section
The bottom section of the form is clearly marked:
DO NOT COMPLETE — FOR DEPARTMENT USE ONLY
Applicants, principals, sureties, and their representatives should leave this area blank.
It contains spaces used by the Department of Revenue for internal processing.
Initials
Leave this field blank. It is reserved for department personnel.
Date
Leave this field blank. The Department of Revenue uses it during processing.
Reviewed
Do not enter anything on the review lines. They are intended for the department’s review process.
Common Mistakes to Avoid
One common mistake is using a business name that does not match the legal name of the principal. The name entered at the top of the form should correspond with the principal executing the bond.
Another mistake is providing incomplete addresses. Review the principal’s street or P.O. Box, city, state, and ZIP code, as well as the surety and resident-agent addresses where applicable.
Do not overlook the bond number or effective date at the top of the document.
The execution date should also be completed, and the appropriate owner or president and surety representatives should complete their respective sections.
Most importantly, do not write in the area marked for Department use only.
Final Review Before Filing
Before submitting the Kentucky Watercraft Refund Bond, verify the following:
- The bond number is correct.
- The effective date is entered.
- The principal’s full legal name is correct.
- The principal’s street address or P.O. Box is complete.
- The correct city is entered.
- The state and ZIP code are accurate.
- The surety’s legal name is entered correctly.
- The surety’s address is complete.
- You have reviewed the $1,000 bond obligation.
- You understand that the bond concerns compliance with Kentucky Revised Statute 138.445.
- You understand the requirement to repay refunds to which the principal is not entitled.
- The bond execution day, month, and year are complete.
- The appropriate owner or president has completed the principal execution section.
- The surety information has been completed as applicable.
- The attorney-in-fact section has been completed when applicable.
- Kentucky resident agent information has been entered when applicable.
- The resident agent’s address is complete when required.
- The section marked for Department use only has been left blank.
- The completed bond is directed to the Department of Revenue, Motor Fuels Tax Compliance Section in Frankfort, Kentucky 40620.