2023 Nevada Revised Statutes › Chapter 370 - Tobacco: Licenses and Taxes; Supervision of Manufacturers and Wholesale Dealers › NRS 370.683 - Liability of wholesale dealer for required escrow deposits; prepayment by nonparticipating manufacturer of amount of escrow deposit.

1. Except as otherwise provided in subsection 5:
(a) A wholesale dealer is liable for escrow deposits required pursuant to this chapter and chapter 370A of NRS if:
(1) The wholesale dealer receives notice from the Attorney General or the Department that there is a shortfall in a qualified escrow fund with respect to cigarettes of a nonparticipating manufacturer that were stamped or distributed by the wholesale dealer; and
(2) The shortfall is not cured by the wholesale dealer or nonparticipating manufacturer within 90 calendar days after the wholesale dealer receives that notice.
The liability of the wholesale dealer for the escrow deposits must be calculated pursuant to paragraph (b).
(b) If there is a shortfall in the qualified escrow fund of a nonparticipating manufacturer for a calendar quarter, each wholesale dealer that sold or distributed cigarettes of that nonparticipating manufacturer during that calendar quarter shall deposit into an escrow account designated by the Attorney General an amount equal to the shortfall multiplied by a fraction, the numerator of which is the number of cigarettes of that nonparticipating manufacturer that were sold in or into this State by the wholesale dealer during that calendar quarter, and the denominator of which is the total number of cigarettes of that nonparticipating manufacturer that were sold or distributed by all wholesale dealers in or into this State during that calendar quarter. In making the calculation, any cigarettes of the nonparticipating manufacturer that were sold or distributed in or into this State by a wholesale dealer during the calendar quarter in which the wholesale dealer collected and deposited the required escrow deposit amount on or before the due date for deposits for that quarter must be excluded from both the numerator and the denominator of the fraction.
2. To the extent that a wholesale dealer makes any payment with respect to a shortfall pursuant to this section, the wholesale dealer has a claim against the nonparticipating manufacturer for the amount of the payment.
3. A wholesale dealer may require a nonparticipating manufacturer, as a condition of the agreement of the wholesale dealer to purchase the cigarettes of the nonparticipating manufacturer, to:
(a) Prepay the escrow deposit amount of the nonparticipating manufacturer into the escrow account designated in the certification of the nonparticipating manufacturer filed with the Attorney General pursuant to NRS 370.665; and
(b) Require the escrow agent to provide to the wholesale dealer and the Attorney General proof of that prepayment.
4. Upon the request of a wholesale dealer who requires a nonparticipating manufacturer to comply with the provisions of paragraphs (a) and (b) of subsection 3, the Attorney General shall provide to the wholesale dealer a written verification of whether the nonparticipating manufacturer has made the escrow deposits required from the nonparticipating manufacturer pursuant to this chapter and chapter 370A of NRS for a calendar quarter.
5. If a wholesale dealer requires a nonparticipating manufacturer to comply with the provisions of paragraph (a) of subsection 3 and receives a written verification from the Attorney General that the nonparticipating manufacturer has made the escrow deposits required from the nonparticipating manufacturer pursuant to this chapter and chapter 370A of NRS for a calendar quarter:
(a) The wholesale dealer is not liable for any of those escrow deposits required for that calendar quarter;
(b) The provisions of subsection 1 do not apply to the wholesale dealer with respect to any cigarettes of the nonparticipating manufacturer that were sold or distributed in or into this State during that calendar quarter; and
(c) The cigarettes of the nonparticipating manufacturer that were sold or distributed in or into this State by the wholesale dealer during that calendar quarter must be excluded entirely from the calculations required by subsection 1.
(Added to NRS by 2011, 929)