PARRIS N. GLENDENING, Governor

Ch. 645

Article - Commercial Law

11-501.

(b) "Basic cost of cigarettes" means the lesser of the invoice cost or the
replacement cost of cigarettes to the retailer or wholesaler; plus any in-freight charge to
the wholesaler otherwise not included in the invoice cost or the replacement cost; PLUS,
FOR THE WHOLESALER THE FULL FACE VALUE OF ANY APPLICABLE MARYLAND
CIGARETTE TAX PAYABLE BY THE WHOLESALER, minus any trade discount or discount
for cash.

(e) (1) "Cost to the wholesaler", subject to the special cost provisions of § 11-503 of
this subtitle, means the basic cost of cigarettes to a wholesaler, plus a markup to cover his cost
of doing business, which cost of doing business:

(i) Includes the cartage cost to a retailer [plus the full face value of any
cigarette taxes payable by the wholesaler on the cigarettes sold]; and

(ii) In the absence of satisfactory proof of a lesser cost, is presumed to be
5 percent of the basic cost of cigarettes to him.

11-503.

(b) (1) In the absence of satisfactory proof of a lesser aggregate cost of doing
business, a vending machine operator or retailer who purchases cigarettes at prices ordinarily
invoiced to a wholesaler and who receives the wholesaler's discounts on them shall-

(i) First, add to his basic cost of cigarettes the wholesale markup of 5
percent provided for in § 11 1-501 (e) to cover the cost of doing business as a wholesaler[, plus
the full face value of any cigarette taxes payable on them]; and

(ii) Then, on the resultant sum, add the retail markup of 8 percent
provided for in § 1 1-501 (d).

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 1996.

Approved May 23, 1996.

CHAPTER 645
(House Bill 1070)

AN ACT concerning

Health Insurance - Nonprofit Health Service Plans - Provider Reimbursements

FOR the purpose of eliminating a provision requiring nonprofit health service plans to
submit for approval to the Insurance Commissioner the terms and provisions of the
contracts executed with certain health care providers; and generally relating to
nonprofit health service plans.

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