DEPARTMENT OF REVENUE
Division of Liquor Enforcement
LIQUOR CODE
1 CCR 203-2

Regulation 47-323.  LAWFUL EXTENSION OF CREDIT
A. DEFINITIONS: FOR PURPOSES OF THIS REGULATION, THE FOLLOWING DEFINITIONS ARE APPLICABLE:
	1. “SUPPLYING LICENSEE” MEANS THOSE PERSONS AUTHORIZED PURSUANT TO 	ARTICLES 46 AND 47 OF TITLE 12 TO SELL FERMENTED MALT BEVERAGE, MALT 	LIQUOR, VINOUS LIQUOR, AND SPIRITUOUS LIQUORS TO LICENSED RETAILERS.  
	2. “RETAILER” MEANS THOSE PERSONS LICENSED PURSUANT TO 12-47-401(h) – (t) AND 	12-46-104(c) TO SELL ALCOHOL BEVERAGES TO THE END CONSUMER. 
	3. “CASH” MEANS UNITED STATES CURRENCY.
	4. “CASH EQUIVALENT” MEANS A FINANCIAL TRANSACTION OR NEGOTIABLE 	INSTRUMENT OTHER THAN CASH, INCLUDING: BANK DRAFTS (BUSINESS OR 	PERSONAL CHECK, CASHIER’S CHECK, CERTIFIED CHECK) MONEY ORDER, ANY 	OTHER TYPE OF COMPLETED ELECTRONIC FUNDS TRANSFER, OR A 	SUPPLYING LICENSEE’S LAWFULLY-ISSUED CREDIT TO A RETAILER’S 	ACCOUNT. NOTHING IN THIS REGULATION SHALL REQUIRE A SUPPLYING 	LICENSEE TO MAKE AVAILABLE ALL OF THE AFOREMENTIONED TYPES OF CASH 	EQUIVALENT. 
	5.  “ALCOHOL BEVERAGE PURCHASE” MEANS THE DATE UPON WHICH THE ALCOHOL 	BEVERAGE IS DELIVERED TO THE RETAILER AND THE RETAILER TAKES 	POSSESSION.
B. TRANSACTION REQUIREMENTS AND RESTRICTIONS:
	1. REGARDING RETAILERS’ ALCOHOL BEVERAGE PURCHASES ON CREDIT, SUPPLYING 	LICENSEES ARE PROHIBITED FROM EXTENDING CREDIT TO ANY RETAILER FOR 	A PERIOD IN EXCESS OF THIRTY (30) DAYS. 
	2. A SUPPLYING LICENSEE’S DELIVERY OF ALCOHOL BEVERAGES TO A RETAILER MUST 	BE ACCOMPANIED BY A SALES INVOICE THAT SHOWS THE NAME OF THE 	RETAILER, THE PLACE OF DELIVERY (ADDRESS OF THE LICENSED LOCATION), 	THE INVOICE DATE, THE DATE OF DELIVERY, A FULL DESCRIPTION OF THE 	ALCOHOL BEVERAGES DELIVERED AND ACCEPTED, A FULL DESCRIPTION OF 	ANY ITEMS ON BACKORDER TO BE DELIVERED ON A DIFFERENT DATE, AND THE 	PRICE AND TERMS OF SALE.  
3. IF THERE ARE DISCREPANCIES BETWEEN THE PRODUCT DESCRIBED IN THE ORIGINAL SALES INVOICE AND THE ACTUAL DELIVERY, HANDWRITTEN AMENDMENTS SHALL BE MADE TO THE INVOICE TO REFLECT ANY CORRECTIONS AND SHALL BE INITIALED BY AN AUTHORIZED REPRESENTATIVE OF THE RETAILER OR SUPPLYING LICENSEE.  INVOICED PRODUCT THAT WILL BE DELIVERED ON ANOTHER DATE MUST BE RE-INVOICED BY THE SUPPLYING LICENSEE TO REFLECT THE DATE UPON WHICH THE ACTUAL DELIVERY TOOK PLACE.
	4. WHERE THERE IS LAWFUL OWNERSHIP OF MULTIPLE, SEPARATELY-LICENSED 	RETAIL LOCATIONS, EACH LOCATION MUST BE CONSIDERED SEPARATE AND 	DISTINCT WITH RESPECT TO ALCOHOL BEVERAGE PURCHASES.  THEREFORE, 	A SUPPLYING LICENSEE SHALL CONSIDER EACH LOCATION AS SEPARATE AND 	DISTINCT FOR THE PURPOSE OF EXTENDING CREDIT.  FOR RETAILERS 	HOLDING A RESORT COMPLEX CLASS OF HOTEL AND RESTAURANT LICENSE, 	ALL AREAS WITHIN THE RESORT CONPLEX MUST BE CONSIDERED AS A SINGLE 	LOCATION FOR THE PURPOSE OF EXTENDING CREDIT.
C.  CALCULATON OF LAWFUL CREDIT PERIOD:
	1. THE LAWFUL CREDIT PERIOD IS THIRTY (30) CALENDAR DAYS. 
	2. FOR THE PURPOSE OF DETERMINING COMPLIANCE WITH THIS REGULATION, THE 	CREDIT PERIOD SHALL COMMENCE ON THE DATE OF THE ALCOHOL BEVERAGE 	PURCHASE AND CONCLUDE ON THE DATE OF FULL LEGAL DISCHARGE FROM 	ALL INDEBTEDNESS ARISING FROM THE SALES TRANSACTION RELATED TO THE 	DELIVERY, EXCEPT AS OTHERWISE PROVIDED IN PARAGRAPH G OF THIS 	REGULATION. 
	3. IF THE FINAL DAY OF THE LAWFUL CREDIT PERIOD FALLS ON A SATURDAY, SUNDAY, 	OR LEGAL HOLIDAY, THE FINAL DATE SHALL BE THE NEXT BUSINESS DAY.
	4. FOR THE PURPOSE OF CALCULATING THE CREDIT PERIOD ONLY, A RETAILER’S 	ACCEPTANCE OF AN ALCOHOL BEVERAGE DELIVERY AND SALES INVOICE 	VERIFYING THE DELIVERY IS A PER SE ACCEPTANCE OF THE DELIVERY AND 	SALES TERMS.
	5. ERRORS AND REFUSALS OF DELIVERED PRODUCT MUST BE NOTED ON EITHER	LICENSEE’S COPY OF THE SALES INVOICE BY AN AUTHORIZED 	REPRESENTATIVE OF EITHER LICENSEE. 
D. REQUIRED PAYMENT DURING LAWFUL CREDIT PERIOD:
	1. A RETAILER’S PAYMENT ON A SUPPLYING LICENSEE’S CREDIT SALE SHALL BE 	RECOGNIZED AS THE EARLIER OF:  
	2. THE DATE THE PAYMENT IS DEPOSITED BY THE SUPPLYING LICENSEE, OR 
	3. THE DATE THE TRANSACTION IS RECORDED IN THE LICENSEE’S ACCOUNTING 	RECORDS, OR 
	4. THE DATE THE SUPPLYING LICENSEE OR ITS AUTHORIZED REPRESENTATIVE 	RECEIVES THE RETAILER’S PAYMENT IN PERSON, OR
	5. THE DATE A RETAILER CAN REASONABLY VERIFY, THROUGH ITS OWN BOOKS AND 	RECORDS, TENDER OF PAYMENT TO A SUPPLYING LICENSEE. IN ORDER TO 	ENSURE COMPLIANCE WITH THIS REGULATION, RETAILERS MUST MAKE 	AVAILABLE TO THE SUPPLYING LICENSEE, UPON THEIR REQUEST, THOSE 	RECORDS THAT VERIFY THE DATE OF TENDER. 
	6. THE FOLLOWING SHALL NOT BE CONSIDERED A LAWFUL DISCHARGE OF 	INDEBTEDNESS FOR THE PURPOSE OF ADVANCING ANY ADDITIONAL CREDIT 	TO A RETAILER:
a. BUSINESS OR PERSONAL CHECKS THAT ARE RETURNED TO THE SUPPLYING LICENSEE AS UNPAID IF REPLACEMENT FUNDS ARE NOT TENDERED WITHIN THE LAWFUL CREDIT PERIOD.
b. DISPUTE CLAIMS FILED BY A RETAILER TO A CREDIT CARD PROVIDER FOR CREDIT CARD ADVANCES IT HAD PREVIOUSLY AUTHORIZED FOR PRODUCT DELIVERY, EXCEPT AS OTHERWISE PROVIDED IN PARAGRAPH G OF THIS REGULATION.
c. A COMPROMISE OF INDEBTEDNESS BETWEEN SUPPLYING LICENSEE AND RETAILER THAT IS COMMERCIALLY UNREASONABLE.
d. AN ASSIGNMENT OF A SUPPLYING LICENSEE’S ACCOUNTS RECEIVABLE FOR THIRD PARTY COLLECTION, WHEN THE DISCHARGE OF INDEBTEDNESS IS DEPENDENT UPON COLLECTION FROM THE RETAILER.
e. THE SUPPLYING LICENSEE’S TEMPORARY CREDIT TO A RETAILER’S ACCOUNT, THEREBY PROVIDING THE APPEARANCE THAT A RETAILER IS ELIGIBLE FOR ADDITIONAL CREDIT.
E. UNLAWFUL EXTENSION OF CREDIT
	1. ANY SUPPLYING LICENSEE THAT HAS NOT RECEIVED FULL PAYMENT ON A SALES 	INVOICE ON OR BEFORE THE CONCLUSION OF THE 30 DAY CREDIT PERIOD, AS 	CALCULATED PURSUANT TO PARAGRAPH D OF THIS REGULATION, HAS NOT 	ENGAGED IN A PER SE VIOLATION OF THIS REGULATION, BUT IS PROHIBITED 	FROM EXTENDING ADDITIONAL CREDIT TO THE INDEBTED RETAILER.
2. A SUPPLYING LICENSEE SHALL NOT ADVANCE ANY ADDITIONAL CREDIT TO THE INDEBTED RETAILER UNTIL THE PAST DUE INDEBTEDNESS IS FULLY DISCHARGED. 
	3. A SUPPLYING LICENSEE MAY CONTINUE TO SELL ALCOHOL BEVERAGE PRODUCTS 	TO THE INDEBTED RETAILER ONLY IF CASH OR CASH EQUIVALENT IS PROVIDED 	AT THE TIME OF EACH ADDITIONAL DELIVERY.
	4. A SUPPLYING LICENSEE’S NORMAL AND CUSTOMARY BUSINESS PRACTICE RELATED 	TO THE ASSESSMENT OF FINANCE CHARGES ON CREDIT BALANCES THAT 	EXCEED 30 DAYS IS NOT A PER SE VIOLATION OF THIS REGULATION.
F. RECORD KEEPING REQUIREMENTS FOR SUPPLYING LICENSEES:
	1. PURSUANT TO 12-47-701, LICENSEES SHALL KEEP AND MAINTAIN BUSINESS 	RECORDS NECESSARY TO FULLY SHOW THE BUSINESS TRANSACTIONS OF 	SUCH LICENSEE. THE FOLLOWING ADDITIONAL MINIMUM REQUIREMENTS 	SHALL BE MET IN ORDER TO DEMONSTRATE COMPLIANCE WITH THIS 	REGULATION. 

	2. BEFORE A SUPPLYING LICENSEE EXTENDS CREDIT TO A RETAILER, IT SHALL 	REVIEW THE CREDIT STATUS OF THE RETAILER’S ACCOUNT TO DETERMINE 	WHETHER ANY UNPAID BALANCE REMAINS ON A CREDIT SALE THAT IS BEYOND 	THE LAWFUL CREDIT PERIOD FOR SUCH SALE.  THE SUPPLYING LICENSEE 	SHALL DEVELOP A PROCEDURE THAT DOCUMENTS THIS CREDIT VERIFICATION 	PROCESS, AND SHALL BE OBLIGATED TO DEMONSTRATE COMPLIANCE UPON 	ANY REVIEW BY THE STATE LICENSING AUTHORITY. 
	3. THE SUPPLYING LICENSEE SHALL MAINTAIN SUFFICIENT RECORDS THAT VERIFY 	THE DATE OF DELIVERY AS THE COMMENCEMENT OF THE LAWFUL CREDIT 	PERIOD. 
	4. A SUPPLYING LICENSEE THAT EXTENDS CREDIT TO RETAILERS SHALL DEVELOP A 	METHOD OF VERIFYING AND DOCUMENTING THE DATE(S) OF PAYMENT, AND 	THE FINAL DISCHARGE OF INDEBTEDNESS OF EACH SALES INVOICE IF IT 	RECOGNIZES A PAYMENT DATE SOONER THAN THE DATE OF ITS FINAL 	ACCOUNTING ENTRY. THIS MAY INCLUDE THE RETENTION OF POSTMARKED 	ENVELOPES, HAND WRITTEN RECEIPT LEDGERS, HAND WRITTEN 	ACKNOWLEDGEMENT OF RECEIPT ON THE SUPPLYING LICENSEE’S COPY OF A 	SALES INVOICE, OR OTHER ACCOUNTING RECORDS DEVELOPED BY THE 	SUPPLYING LICENSEE.  
	5. A RETAILER’S RECORDS MAY SUPPLEMENT THE SUPPLYING LICENSEE’S RECORDS 	IN DETERMINING COMPLIANCE WITH RECORD KEEPING REQUIREMENTS, BUT 	SHALL NOT MITIGATE A SUPPLYING LICENSEE’S LACK OF COMPLIANCE.
	6. A SUPPLYING LICENSEE THAT EXTENDS CREDIT TO RETAILERS SHALL KEEP A 	RECORD OF THOSE RETAILERS THAT DID NOT DISCHARGE 	INDEBTEDNESS WITHIN THE LAWFUL CREDIT PERIOD, AND EVIDENCE THAT 	SUBSEQUENT SALES WERE CASH OR CASH EQUIVALENT ON DELIVERY UNTIL 	THE INDEBTEDNESS WAS DISCHARGED. 
G. DISPUTE RESOLUTION: THE PURPOSE OF THIS SECTION SHALL BE SOLELY FOR THE PURPOSE OF DETERMINING IF A SUPPLYING LICENSEE MAY CONTINUE TO EXTEND CREDIT TO A RETAILER WHEN TRANSACTION AMOUNTS IN DISPUTE CANNOT BE RESOLVED WITHIN THE LAWFUL CREDIT PERIOD.  NOTHING HEREIN SHALL RESTRICT THE LICENSEES FROM EXERCISING THEIR CONTRACTUAL RIGHTS IN CIVIL DISPUTES.
	1. IF THERE IS A GOOD FAITH DISPUTE BY A RETAILER AS TO THE VALIDITY OR 	REASONABLENESS OF THE AMOUNT OWED OR THE PAYMENT MADE TO THE 	SUPPLYING LICENSEE, THEN THE RETAILER SHALL GIVE WRITTEN NOTICE TO 	THE SUPPLYING LICENSEE PRIOR TO THE CLOSE OF THE LAWFUL CREDIT 	PERIOD.  THE RETAILER SHALL INCLUDE THE DISPUTED AMOUNT DUE OR 	PAYMENT TENDERED, THE INVOICE NUMBER, AND A DETAILED REASON FOR 	THE DISPUTE. 
	2. UPON RECEIPT OF WRITTEN NOTIFICATION, THE SUPPLYING LICENSEE SHALL 	DETERMINE ITS POSITION AND RESPOND WITHIN 15 DAYS OF THE RETAILER’S 	WRITTEN NOTIFICATION. THE SUPPLYING LICENSEE MAY CONTINUE TO 	EXTEND 30 DAYS CREDIT ON NEW PURCHASES PENDING THE RESOLUTION OF 	THE DISPUTE, SO LONG AS THE RETAILER HAS PROVIDED WRITTEN NOTICE AS 	DESCRIBED IN PARAGRAPH G.1., AND HAS TENDERED PAYMENT FOR ALL 	AMOUNTS NOT IN DISPUTE.  

	3. FOR PURPOSES OF THIS REGULATION, THE AMOUNT OF A QUALIFYING PRICE 	DISPUTE SHALL BE CALCULATED AS THE DISPUTED PRICE DIFFERENTIAL TIMES 	THE NUMBER OF CASES PURCHASED.  FOR EXAMPLE, IF THE SUPPLYING 	LICENSEE INVOICES A CASE OF ALCOHOL BEVERAGE AT $11.00 PER CASE, AND 	THE RETAILER’S RECORDS REFLECT A NEGOTIATED CASE DEAL OF $10.00, 	THEN THE AMOUNT IN DISPUTE FOR PURPOSES OF THIS REGULATION IS 	CALCULATED AS $1.00 TIMES THE NUMBER OF CASES PURCHASED.
	4. THE SUPPLYING LICENSEE IS PROHIBITED FROM EXTENDING 30 DAYS CREDIT ON 	NEW PURCHASES IF THE RETAILER FAILS TO CLAIM DISPUTES IN THE MANNER 	DESCRIBED IN THIS SECTION OR FAILS TO MAKE FULL PAYMENT OF 	UNDISPUTED AMOUNTS ON OR BEFORE THE END OF THE LAWFUL CREDIT 	PERIOD.  A RETAILER’S ACTION TO STOP OR DELAY PAYMENT ON ANY 	FINANCIAL TRANSACTION DOES NOT QUALIFY AS PROPER WRITTEN NOTICE TO 	A SUPPLYING LICENSEE OF A GOOD FAITH DISPUTE.  
	5. ONCE A DISPUTE IS RESOLVED, A RETAILER WILL HAVE 30 DAYS TO PAY ANY 	AMOUNT DUE AND/OR A SUPPLYING LICENSEE WILL HAVE THE SAME PERIOD 	OF TIME TO ADJUST ITS RECORDS TO REFLECT THE OUTCOME.  IF THE 	DISPUTE RESOLUTION PROCESS IS UNSUCCESSFUL AFTER GOOD FAITH 	EFFORTS BY BOTH PARTIES, AND ANY AMOUNT DUE WOULD OTHERWISE BE 	PLACED FOR COLLECTION, THE SUPPLYING LICENSEE MUST CEASE THE 	EXTENSION OF CREDIT TO THE RETAILER AND SHALL CONDUCT ANY FUTURE 	SALE OF ALCOHOL BEVERAGES FOR CASH OR CASH EQUIVALENT ON 	DELIVERY.   
	6. SUPPLYING LICENSEES AND RETAILERS SHALL KEEP SUFFICIENT RECORDS TO 	DOCUMENT THOSE DISPUTES THAT ARE USED AS JUSTIFICATION FOR THE 	CONTINUED EXTENSION OF CREDIT, WHICH WOULD OTHERWISE BE 	PROHIBITED. 
H. UNLAWFUL FINANCIAL ASSISTANCE:
	1. EXCEPT AS PROVIDED FOR IN PARAGRAPH G OF THIS REGULATION, A SUPPLYING 	LICENSEE WHO CONTINUES TO EXTEND CREDIT TO A RETAILER WHO HAS NOT 	FULLY DISCHARGED INDEBTEDNESS THROUGH THE LAWFUL MEANS 	DESCRIBED IN THIS REGULATION, OR WHO FAILS TO EXERCISE DUE DILIGENCE 	WITH THE REQUIREMENTS OF THIS REGULATION, MAY BE SANCTIONED BY THE 	STATE LICENSING AUTHORITY FOR PROVIDING UNLAWFUL FINANCIAL 	ASSISTANCE TO A RETAILER, AS PROVIDED FOR IN 12-47-308(1)(a), C.R.S. AND 	RELATED REGULATIONS.  
	2. EXCEPT AS PROVIDED FOR IN PARAGRAPH G OF THIS REGULATION, A RETAILER 	WHO FAILS TO PAY THE AMOUNTS DUE TO THE SUPPLYING LICENSEE AFTER 	THE CONCLUSION OF THE LAWFUL CREDIT PERIOD, AND WHO RECEIVES OR 	REQUESTS FURTHER SALES ON CREDIT FROM THAT SUPPLYING LICENSEE, 	MAY BE SANCTIONED BY THE STATE LICENSING AUTHORITY FOR RECEIPT OF 	UNLAWFUL FINANCIAL ASSISTANCE FROM THE SUPPLYING LICENSEE, AS 	PROVIDED FOR IN 12-47-308(3)(a), C.R.S. AND RELATED REGULATIONS. 	UNLAWFUL FINANCIAL ASSISTANCE SHALL INURE TO THE RETAILER AFTER THE 	SUPPLYING LICENSEE HAS MADE FINAL DEMAND FOR PAYMENT THROUGH 	WRITTEN CORRESPONDENCE OR OTHER MEANS OF COMMERCIAL DEBT 	COLLECTION AND HAS MADE SUBSEQUENT SALES ON CREDIT.