Md. Code Regs. 02.07.01.03

Current through Register Vol. 51, No. 24, December 2, 2024

Section 02.07.01.03 - Quarterly Escrow Payments

A. A nonparticipating manufacturer shall make the escrow payments required by the Escrow Act in quarterly installments during the year in which the sales covered by the payments are made, if the nonparticipating manufacturer has:

(1) Not previously established and funded a qualified escrow fund in Maryland;

(2) Not made any escrow payments for more than 1 year;

(3) Failed to make a timely or complete escrow payment for a prior calendar year;

(4) Failed to pay a judgment or civil penalty in connection with its Maryland sales; or

(5) Sold more than 1,600,000 cigarettes in Maryland during a calendar quarter.

B. The Attorney General may require a nonparticipating manufacturer to make quarterly escrow payments if the Attorney General finds reasonable cause to believe the nonparticipating manufacturer will not make its fully required escrow deposit by April 15 of the year following the year in which the cigarettes are sold.

C. If a quarterly payment obligation is required under §A or B of this regulation, the Attorney General may require the nonparticipating manufacturer to make immediate escrow payments for amounts that would have been due had a quarterly escrow requirement been in effect as of January 1 of the same year.

D. A nonparticipating manufacturer may request from the Attorney General a waiver from a quarterly payment obligation imposed under §A(3) of this regulation. The Attorney General may waive application of the quarterly payment obligation if the Attorney General finds that:

(1) The nonparticipating manufacturer has paid in full its escrow obligations; and

(2) There is reasonable cause to believe that the nonparticipating manufacturer will pay in full its required escrow deposit by April 15 of the year following the year in which the cigarettes are sold.

E. The quarterly payments shall reflect an inflation rate of 3 percent. Nonparticipating manufacturers subject to a quarterly payment obligation shall make a final reconciliation payment on or before April 15 of the year following the year in which the cigarettes are sold in order to account for the annual adjustment for inflation under the Escrow Act.

Md. Code Regs. 02.07.01.03

Regulations .03 adopted as an emergency provision effective November 23, 2004 (31:25 Md. R. 1788); adopted permanently effective February 14, 2005 (32:3 Md. R. 288)