Individuals that collect taxes for municipalities and other government agencies need a Tax Collector Surety Bond which is a legally binding contract. It ensures the collector conducts business for the public ethically. Some states including Mississippi, Texas, Illinois, and Pennsylvania.
The bond amount needs to be 100% of the public funds the official will manage. However, some jurisdictions put a maximum cap on the bond amount if the bond amount is too high since getting credentials for such high amounts can be almost impossible.
Three parties are legally bound together with this bond:
The goals for this bond.
For example, in Texas, a Texas Tax Collector Bond is required by the State of Texas for the collector to comply with the State licensing requirements. The bond promises the tax collector will fulfill their responsibilities legally and ethically. If the tax collector does not abide by the rules stated by the bond, the surety will pay out the claim.