KRS 371.170: Contracts for the payment of manufacturers' excise taxes.

(1) If a contract requires one (1) party to reimburse another party for taxes levied under

Part III of Subchapter A of Chapter 32 of the Internal Revenue Code, the party

making the reimbursement, at its option, shall not be required to reimburse the other

party more than one (1) business day before the other party is required to remit the

taxes to the Internal Revenue Service.

(2) If a party chooses to exercise its option under subsection (1) of this section, and

provision is not already provided in the contrac t, the party shall notify the other

party in writing of its intention. The option may not be exercised until at least thirty

(30) days after the written notification or the beginning of the next federal tax

quarter, whichever is later.

(3) The party to be reimbursed under subsection (1) of this section may require security

from the reimbursing party for the payment of the taxes in proportion to the amount

the taxes represent compared to the security required on the contract as a whole.

The party to be reimbursed shall not change other payment terms of the contract due

to the timing of the tax reimbursement, but may require the taxes to be reimbursed

by electronic transfer of funds.