senate Bill S2008A

Relates to taxes on cigarettes sold on an Indian reservation to non-members of the Indian nation or tribe

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 14 / Jan / 2011
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 04 / Jan / 2012
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 13 / Jan / 2012
    • AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 13 / Jan / 2012
    • PRINT NUMBER 2008A

Summary

Relates to taxes on cigarettes sold on an Indian reservation to non-members of the Indian nation or tribe; reverts the tax back to the previous $2.75 if taxes on such cigarettes are not collected by 9/1/2012 and then changes the tax to $4.35 once the state begins collecting such taxes.

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Bill Details

See Assembly Version of this Bill:
A1101A
Versions:
S2008
S2008A
Legislative Cycle:
2011-2012
Current Committee:
Senate Investigations And Government Operations
Law Section:
Tax Law
Laws Affected:
Amd ยง471, Tax L
Versions Introduced in 2009-2010 Legislative Cycle:
S8496, A11720

Sponsor Memo

BILL NUMBER:S2008A

TITLE OF BILL:
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

PURPOSE:
This bill temporarily suspends the $1.60 cigarette tax increase until
the state begins collecting taxes on cigarettes sold on an Indian
Reservation to nonmembers of the Indian Nation or Tribe.

SUMMARY OF PROVISIONS:
Amends section 471 of the Tax Law by adding language to temporarily
suspend the $1.60 cigarette tax increase until the state begins
collecting taxes on cigarettes sold on an Indian Reservation to
nonmembers of the Indian Nation or Tribe. If the state fails to
collect the tax, this bill would impose the cigarette tax at $2.75;
once the state begins collecting, the cigarette tax rate would be
imposed at $4.35.

JUSTIFICATION:
Chapter 134 of the Laws of 2010 (Emergency Spending Bill), raised
various taxes, including a $1.60 cigarette tax increase beginning
July 1, 2010, and set a firm deadline of September 1, 2010 to begin
collecting taxes on cigarettes sold on an Indian Reservation to
nonmembers of the Indian Nation or Tribe. On July 1st, the cigarette
tax increase went into effect. However, on the September 1st
deadline to collect taxes on cigarettes sold on an Indian Reservation
to nonmembers of the Indian Nation or Tribe, Indian nations filed
suits in state and federal courts.
The courts responded by temporarily halting the September 1st
collection date. The current cigarette tax increase and the
subsequent failure of the State to collect taxes has only widened the
gap of inequity between retailers and Indian nation sellers. It is
not fair to uphold one part of Chapter 134 of the Laws of 2010 and
yet temporarily halt another part of the law. Consequently, this bill
aims to uphold fairness by temporarily suspending the $1.60 cigarette
tax increase until the State begins collecting taxes on cigarettes
sold on an Indian Reservation to nonmembers of the Indian Nation or
tribe.

LEGISLATIVE HISTORY:
2010: S.8496 - Rules Committee; A.11720 - Ways and Means
2011: S.2008 - S.2008 Investigations Committee -
A.1101 - Ways and Means

FISCAL IMPLICATIONS:
The fiscal impact is dependent upon the State collecting taxes on
cigarettes sold on an Indian Reservation to nonmembers of the Indian
Nation or tribe. The 2010-11 State fiscal year financial plan assumed

the collection of $114 million in taxes from Indian reservation sales
to non-Indians and $260 million in additional revenue from the
increase in the excise tax of $1.60 per pack of 20 cigarettes.

EFFECTIVE DATE:
Immediate.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 2008--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            January 14, 2011
                               ___________

Introduced  by  Sens.  GRIFFO, LARKIN -- read twice and ordered printed,
  and when printed to be committed to the  Committee  on  Investigations
  and  Government Operations -- recommitted to the Committee on Investi-
  gations and Government Operations in accordance with  Senate  Rule  6,
  sec.  8  --  committee  discharged, bill amended, ordered reprinted as
  amended and recommitted to said committee

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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05161-02-1

S. 2008--A                          2

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
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 TWELVE, THAT SUCH  CIGARETTE  TAX
RATE  WOULD  REVERT TO THE RATE OF TWO DOLLARS AND SEVENTY-FIVE CENTS AS
PREVIOUSLY STATED IN LAW BEFORE THE PASSAGE OF CHAPTER ONE HUNDRED THIR-
TY-FOUR OF THE LAWS OF TWO THOUSAND TEN. ONCE THE STATE BEGINS  COLLECT-
ING  TAXES ON CIGARETTES SOLD ON AN INDIAN RESERVATION TO NON-MEMBERS 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 cigarettes. 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.

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