Secured cigarette stamp purchases on credit; cancellation of credit privileges;
collection action; bonding requirement; waiver
A. Subject to subsections B and C of this section, and except as provided
in subsection D of this section, a licensed distributor who furnishes
a bond of a surety company qualified to do business in this state, in
an amount equal to two times the amount of the distributor's current
monthly stamp purchases and conditioned upon the payment within the time
prescribed, may make payment for the official stamp on or before the twentieth
day of the month next following the purchase of an official stamp. All
other distributors shall pay for each stamp at the time of purchase.
B. Upon a finding that the amount of stamp purchases, or meter machine
usage, exceeds seventy-five percent of the amount of the bond, the department
may cancel the credit privileges provided to qualified distributors pursuant
to subsection A of this section.
C. If the indebtedness of a distributor whose credit privileges have been
canceled pursuant to this section remains unpaid for thirty days after
cancellation, the director shall request the attorney general to take
suitable action on behalf of the department to collect either on the indebtedness
or the surety bond.
D. The distributor may request that the department waive the bonding requirement
in subsection A of this section if the distributor maintains a timely,
accurate and complete filing and payment record for a period of two years
and otherwise complies with all requirements of a licensed distributor
pursuant to this chapter and title 44, chapter 27. The waiver of the bonding
requirement applies only to the distributor's purchases of tax stamps
with which the distributor prepays the Indian reservation tobacco tax,
pursuant to section 42-3303.