S T A T E   O F   N E W   Y O R K
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                                  11720

                          I N  A S S E M B L Y

                            October 13, 2010
                               ___________

Introduced  by  COMMITTEE  ON  RULES -- (at request of M. of A. Kolb) --
  read once and referred to the Committee on Ways and Means

AN ACT to amend the tax law, in relation to taxes on cigarettes sold  on
  an Indian reservation to non-members of the Indian nation or tribe

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision 1 of section 471 of the tax law, as amended  by
section  1  of  part D of chapter 134 of the laws of 2010, is amended to
read as follows:
  1. There is hereby imposed and shall be paid a tax on  all  cigarettes
possessed  in the state by any person for sale, except that no tax shall
be imposed on cigarettes sold under such circumstances that  this  state
is  without power to impose such tax, including sales to qualified Indi-
ans for their own use and consumption on their nations' or tribes' qual-
ified reservation, or sold to the United States  or  sold  to  or  by  a
voluntary  unincorporated organization of the armed forces of the United
States operating a place for the sale of goods pursuant  to  regulations
promulgated by the appropriate executive agency of the United States, to
the extent provided in such regulations and policy statements of such an
agency  applicable  to  such  sales.  The tax imposed by this section is
imposed on all cigarettes sold on an Indian reservation  to  non-members
of  the  Indian  nation or tribe and to non-Indians and evidence of such
tax shall be by means of an affixed cigarette tax stamp. Indian  nations
or  tribes  may  elect to participate in the Indian tax exemption coupon
system established in section four hundred seventy-one-e of this article
which provides a mechanism for the collection of the tax imposed by this
section on cigarette sales on qualified reservations to such non-members
and non-Indians and for the delivery of quantities of  tax-exempt  ciga-
rettes  to Indian nations or tribes for the personal use and consumption
of qualified members of the Indian nation or tribe. If an Indian  nation
or  tribe  does  not  elect  to  participate in the Indian tax exemption
coupon system, the prior approval system shall be the mechanism for  the
delivery  of  quantities  of  tax-exempt cigarettes to Indian nations or
tribes for the personal use and consumption of qualified members of  the

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD18122-01-0

A. 11720                            2

Indian  nation  or tribe as provided for in paragraph (b) of subdivision
five of this section. Such tax on cigarettes shall be  at  the  rate  of
four  dollars  and thirty-five cents for each twenty cigarettes or frac-
tion  thereof,  provided,  however,  that  if  a  package  of cigarettes
contains more than twenty cigarettes, the rate of tax on the  cigarettes
in  such  package  in excess of twenty shall be one dollar and eight and
three-quarters cents for  each  five  cigarettes  or  fraction  thereof.
PROVIDED  FURTHER THAT IF THE STATE FAILS TO COLLECT TAXES ON CIGARETTES
SOLD ON AN INDIAN RESERVATION TO NON-MEMBERS OF  THE  INDIAN  NATION  OR
TRIBE BY SEPTEMBER FIRST, TWO THOUSAND TEN, THAT SUCH CIGARETTE TAX RATE
WOULD REVERT TO THE RATE OF TWO DOLLARS AND SEVENTY-FIVE CENTS AS PREVI-
OUSLY   STATED  IN  LAW  BEFORE  THE  PASSAGE  OF  CHAPTER  ONE  HUNDRED
THIRTY-FOUR OF THE LAWS OF TWO  THOUSAND  TEN.  ONCE  THE  STATE  BEGINS
COLLECTING TAXES ON CIGARETTES SOLD ON AN INDIAN RESERVATION TO NON-MEM-
BERS  OF  THE  INDIAN  NATION  OR TRIBE, THE CIGARETTE TAX RATE WOULD BE
IMPOSED AT FOUR DOLLARS AND THIRTY-FIVE CENTS AS  SPECIFIED  IN  CHAPTER
ONE  HUNDRED  THIRTY-FOUR  OF  THE LAWS OF TWO THOUSAND TEN. Such tax is
intended to be imposed upon only one sale of the same package  of  ciga-
rettes.  It  shall  be presumed that all cigarettes within the state are
subject to tax until the contrary is  established,  and  the  burden  of
proof  that  any  cigarettes are not taxable hereunder shall be upon the
person in possession thereof.
  S 2. This act shall take effect immediately.