HOUSE DOCKET, NO. 1474        FILED ON: 1/13/2009

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2809

The Commonwealth of Massachusetts

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In the Year Two Thousand Nine

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An Act relative to the timing of reimbursement for federal manufacturers excise tax..

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1.  Chapter 93 of the Massachusetts General Laws is hereby amended by adding the following section: ― 

                § 44.  Timing of Reimbursement for Federal Excise Tax on Petroleum Products ― 

(a) When a contract calls for one party to reimburse the other party for the federal manufacturer's excise tax levied by Part III of Subchapter A of Chapter 32 of the United States Internal Revenue Code, whether as a separate item or as part of the price, the party required to make the reimbursement may tender payment for the taxes 1 business day before 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 exercise the option provided in subsection (a) of this section, the other party may demand security for the payment of the taxes in proportion to the amount such taxes represent compared to the security demanded on the contract as a whole. The other party, however, may not change the other payment terms of the contract without a valid business reason except to require the payment of such taxes under the option to be made by electronic transfer of funds. 

(c) The party exercising the option set out in subsection (a) of this section shall notify the other party in writing of the intent to exercise such payment option and the effective date of the exercise which shall be no 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 in effect on [effective date], which have no expiration date and are continuing contracts and to all other contracts entered into or renewed after [effective date].  Any contract in force and effect on [effective date], which, by its own terms will terminate on a date subsequent thereto, shall be governed by the law as it existed prior to [effective date]. 

(e) The option set out in subsection (a) of this section shall not be construed to impair the obligations arising under any contract executed prior to [effective date]. Should the option set out in subsection (a) of this section be exercised, it shall not relieve such party of the obligation to make the reimbursement as provided for in the contract but shall affect only the timing of when that reimbursement must be tendered.