Important Notice to Non-participating Manufacturers Regarding 2004 Reporting and Escrow Payment Requirements

1. The RSA 541-C Certification Form included on this website contains an ADJUSTED inflation factor, which is different from the factor included in the Form mailed to you in early March, but identical to the Form sent to you during the week of March 28, 2004. Please use this form to calculate your final total due to escrow in 2004.

2. On August 10, 2004, the state of New Hampshire adopted amendments to RSA 541-D and 541-C, which, among other things, (i) established that, going forward, Non-participating manufacturers (NPMs) are responsible for quarterly payments into escrow accounts for sales of their products in the state of New Hampshire and, (ii) eliminated the so-called "allocable share" adjustment for escrow payments under RSA 541-C.

3. The quarterly payment obligation became effective for the third quarter of 2004. Ordinarily, a quarterly payment for the fourth quarter in 2004 would be due and payable on or before April 15, 2005. However, the fact that quarterly payments were not required until the third quarter of 2004 means that the April, 2005 payment must encompass the entire sales year 2004. Thus, for 2005 only, the payment due on April 15, 2005 will be for the full sales year 2004, less any amount already deposited into escrow with respect to the third quarter.

4. The state takes the position that the amended statute applies to quarterly payments due and payable after the effective date of the statute. Thus, payments made for the third and fourth quarters of 2004 are not eligible for an allocable share reduction. Payments due and payable for the first and second quarters of 2004 will qualify for allocable share reduction.

a. In practice, this means that escrow deposits for cigarette products stamped by New Hampshire licensed wholesalers prior to July 1, 2004 qualified for an allocable share reduction, while escrow deposits for cigarette products stamped by New Hampshire licensed wholesalers from July, 1 2004 through December 31, 2004 do not qualify for the reduction.

b. We understand that, because of the date of the change in relevant law, your business records for 2004 may not be amenable to a quarterly analysis of sales to New Hampshire. If you do not believe that you have reliable numbers upon which to base a quarterly accounting, for purposes of determining the quantity of products sold in New Hampshire during 2004 which may be eligible for allocable share reduction, please contact his office directly. We will be happy to share with you our records of your company's quarterly sales as derived from reports by New Hampshire licensed wholesalers.

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