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Panel adopts amendment to clarify 'rebate' definition and require traceable payments; passed as amended
Summary
Senator Johnson’s amendment to S.B. 551 clarified that permissible rebates are post-transaction payments (not off-invoice), must be paid by check or electronic transfer, and therefore create an audit trail; the committee approved the bill as amended after industry witnesses supported the changes.
Senator Johnson introduced and moved adoption of an amendment to S.B. 551 intended to address concerns about off-invoice rebates and retail pricing. Grant Fortson, representing Douglas Companies, explained that the amendment defines a rebate as a payment from seller to buyer after the transaction, requires payment by check or electronic transfer, and therefore establishes a clear audit trail. Fortson said the language ensures rebates would not be off-invoice and would not affect retail pricing under existing pricing definitions.
Steve Good, representing Merchants Wholesale Company and the Arkansas Grocers and Retail Merchants Association, testified that the amendment helps Arkansas wholesalers compete with out-of-state wholesalers who may rebate and undercut local businesses. He told the committee the changes "create a level playing field" and that Arkansas Tobacco Control has pursued rebating through audits when resources allowed.
Senator Johnson closed and moved passage as amended; the committee passed S.B. 551 as amended by voice vote.
