Sec. 03.02.01.04. Wine and Distilled Spirits Credit Control

A. Late Payments.

(1) An invoice issued by licensed wholesalers, licensed manufacturers, or nonresident winery permit holders shall:

(a) Accompany each delivery of wine and distilled spirits to licensed retailers;

(b) Be delivered to licensed retailers on the invoice date, or at the latest, on the next delivery date to the area in which the licensed retailer is located; and

(c) Be collected for between the date of the invoice and the applicable due date as scheduled by the Comptroller, unless collected at the time of delivery to the licensed retailer.

(2) All remittances for invoices shall be deposited by the licensed wholesaler, licensed manufacturer, or nonresident winery permit holder not later than the next business day.

(3) The Comptroller shall issue a release annually to all licensed wholesalers, licensed manufacturers, and nonresident winery permit holders containing the list deadline:

(a) Purchase dates; and

(b) Due dates for payments.

(4) A licensed wholesaler, licensed manufacturer, or nonresident winery permit holder shall report:

(a) To the Comptroller those licensed retailers who do not pay an indebtedness for wine or distilled spirits on or before the established due date in the manner the Comptroller requires; and

(b) To the licensed retailer simultaneously with the report filed with the Comptroller.

(5) The Comptroller shall issue a list to licensed wholesalers, licensed manufacturers, and nonresident winery permit holders which shall:

(a) Contain the names and addresses of licensed retailers who have been reported to the Comptroller under §A(4) of this regulation; and

(b) Be issued 2 business days after the due date established by the Comptroller.

(6) The Comptroller is authorized to issue supplementary lists when deemed necessary.

(7) A licensed wholesaler, licensed manufacturer, or nonresident winery permit holder may not sell to any licensed retailer whose name appears on a current or supplementary list issued by the Comptroller, except on a C.O.D. basis.

(8) A licensed wholesaler, licensed manufacturer, or nonresident winery permit holder shall file a clearance report with the Comptroller on the day the indebtedness is paid in full by the licensed retailer.

(9) A clearance report is not eligible for consideration in the preparation of a subsequent credit control list unless the remittance covering the licensed retailer's indebtedness has been received by the licensed wholesaler, licensed manufacturer, or nonresident winery permit holder by the closing time of the due date. These reports shall be transmitted promptly to the Comptroller.

(10) The Comptroller shall remove from the credit control list those licensed retailers reported by a licensed wholesaler, licensed manufacturer, or nonresident winery permit holder in cases when the postmark on the envelope that accompanies the remittance is dated at least 2 days before the applicable due date.

(11) Postdated checks, notes, and other instruments of indebtedness do not constitute payment unless actually convertible into cash not later than the applicable due date or the date received in cases where the check is dated no later than the due date and was mailed in an envelope postmarked not less than 2 days before the applicable due date.

(12) Immediate action shall be taken and followed through to effect the conversion into cash of a returned check given by a licensed retail dealer in payment of a C.O.D. shipment when the licensed retail dealer's name appears on a current list or supplemental list, in order to avoid extension of undue credit.

(13) Pickup of Checks.

(a) Representatives of the licensed wholesaler may not pick up payments from licensed retailers for invoices due for the current list.

(b) Representatives of licensed wholesalers may pick up payments from licensed retailers who are currently on the over-30-day credit control list issued by the Comptroller.

(14) Duplicate Checks.

(a) A licensed wholesaler and a nonresident winery permit holder may accept a duplicate check from a licensed retailer if an affidavit in a manner and form approved by the Comptroller and signed by the licensed retailer accompanies the duplicate check.

(b) The Alcohol and Tobacco Tax Bureau may limit the number of duplicate checks allowed in a calendar year for the purpose of placing or removing a licensed retail account on the over-30-day credit control list.

(15) A licensed retailer shall be reported to the Comptroller for late payment when the payment is received after 5 p.m. on the due date by the licensed wholesaler, except when a good postmark accompanies the payment pursuant to §A(8) of this regulation.

B. Returned Checks.

(1) A check received by a licensed manufacturer, licensed wholesaler, or nonresident winery permit holder which is returned by the bank unpaid is not considered remittance or payment. The amount of the check immediately shall be charged back to the account of the licensed retail dealer who was credited with it.

(2) A licensed manufacturer, licensed wholesaler, or nonresident winery permit holder receiving a check from a licensed retail dealer returned by the bank unpaid, which has or may have the effect of excluding that licensed retail dealer's name from the next list, or has or may have the effect of removing a licensed retail dealer from the current list, or was in payment of a C.O.D. shipment while that licensed retail dealer's name appeared on a current list, shall immediately make a report of the check to the Comptroller.

(3) Licensed manufacturers, licensed wholesalers, or nonresident winery permit holders may not accept other than cash in payment of a reported indebtedness or for a C.O.D. shipment from a licensed retail dealer who has within a period of 6 months given either:

(a) A total of two or more unpaid checks to one or more licensed manufacturers, licensed wholesalers, or nonresident winery permit holders in different list periods; or

(b) Two or more unpaid checks to one licensed manufacturer, licensed wholesaler, or nonresident winery permit holder during one or more list periods, which:

(i) Has or may have the effect of removing the licensed retail dealer from the current list,

(ii) Has or may have the effect of excluding the licensed retail dealer's name from the next list,

(iii) Was in payment of a C.O.D. shipment while the licensed retail dealer's name appeared on a current list.

C. General Provisions.

(1) Information on each periodic list and supplements to it will remain in effect until the next list is issued.

(2) Failure to file correct reports to the Comptroller as provided in this regulation shall constitute a violation of Article 2B, Annotated Code of Maryland.

(3) The Comptroller may also change or extend the due date with notice, under extenuating circumstances.

(4) Reports shall be made to the Comptroller in a manner provided or approved by the Comptroller.

(5) Cash as used in this regulation means U.S. Government coins and paper money, bank cashier checks, certified checks, postal and express money orders, checks of disinterested persons, and travelers' checks.

(6) In order to avoid influence over a licensed retail dealer, licensed manufacturers, licensed wholesalers, and nonresident winery permit holders are required to take definite action toward collection of accounts in arrears in excess of 90 days.

(7) Sales on a consignment or approval basis are not permitted.