§8-1-4. Reimbursement for certain federal manufacturer's excise taxes; option to tender payment one business day before remittance due to Internal Revenue Service; notification and security; applicability.

(a) A party to a contract required to reimburse another party to the contract for the federal manufacturer's excise tax levied pursuant to Sections 4081 to 4083, inclusive, and Section 4091 of Title 26 of the United States Code, whether as a separate item or as a part of the price, may tender payment for the taxes one business day prior to the time that the other party is required to remit the taxes to the United States Internal Revenue Service.

(b) If a party elects to make payment pursuant to subsection (a), the party to which the payment is owed may demand security for the payment of the taxes in proportion to the amount the taxes represent compared to the security demanded on the contract as a whole. The other party may not change the payment terms of the contract without a valid business reason other than the exercise of the option to be made by electronic transfer of funds.

(c) The party exercising the option in subsection (a) shall notify the other party in writing of the intent to exercise the payment option and the effective date of the exercise which shall not be earlier than 30 days after the notice of intent is received or the beginning of the next federal tax quarter, whichever is later.

(d) This section shall apply to all contracts existing on June 1, 1996 in which a reimbursement for taxes due has not been made, and to all other contracts entered into or renewed after June 1, 1996. Additionally and specifically, this section shall also apply to contracts arising from daily wholesale price offers which are accepted or rejected by the acceptance or rejection of products at such stated prices. Each daily price offering is a new offer and each purchase of product at a given price offer creates a new contract to which this section applies.

(e) The exercise of an option pursuant to subsection (a) shall not relieve the party of the obligation to make the reimbursement as provided for in the contract but shall affect only the timing of when that reimbursement shall be tendered.

(Acts 1996, No. 96-408, p. 516, §1.)