To: Tobacco Wholesalers and Registered Other Tobacco Products (OTP) Taxpayers

Subject: Code of Maryland Regulations 03.01.02.01, 02, 04 and 05

Requiring Remittance of Tobacco Taxes in Excess of $10,000.00 by Immediately Available Funds.

The referenced regulations, which were originally effective October 1, 2002, for tobacco taxpayers with an aggregate liability during any tax period in excess of $20,000, were revised November 10, 2003, to require payment by immediately available funds of any tax liability in excess of $10,000.  The regulations define immediately available funds to include Automated Clearing House (ACH) credit or debit, direct debit or U.S. currency.  While the ACH credit method of tax payment, which has been available to our taxpayers for several years, will continue to be available upon request, effective August 1, 2004, the Alcohol and Tobacco Tax Bureau (ATTB) is pleased to announce the availability of an Internet based direct debit payment application designed to aid licensees in complying with the referenced regulations.  A link to this secure, user-friendly Direct Debit Application is available on the ATTB web site.

While certain of our license holders are required to use one of the “immediately available funds” payment options listed above, any licensee wishing to make a tobacco tax payment after August 1, 2004, is encouraged to make use of the new Direct Debit Application.

To take advantage of this option, complete your Cigarette Stamp Purchases and Payments Report or OTP Tax Return and determine the amount of your tax liability as usual.  Then go to the ATTB’s web site, select the “Direct Debit Payment” link and follow the on-screen instructions to have your payment(s) debited from your selected bank account.  Your tax payment(s) will be recorded as having been received on the same date that you complete the direct debit procedure on-line.  While payments in any amount may be submitted using this method, licensees submitting payments in excess of $10,000 on or before the due date using the Direct Debit Payment application will be assured of meeting their obligation, under the regulation, to remit by immediately available funds.  Remember to mail in your tax return in the usual fashion, and indicate on the summary page of the return that payment was made by direct debit.

Any tobacco wholesale license holder or OTP registrant required to remit by immediately available funds, who chooses not to use the Direct Debit Payment application, and is not currently registered to remit by ACH credit, should contact ATTB to advise, no later than August 10, 2004, how they will comply with the regulation.

Larry W. Tolliver
Director