senate Bill S1958B

Amended

Increases the presumed "cost of the agent" relating to cigarette marketing standards and establishes the cigarette tax enforcement account; appropriation

download pdf

Sponsor

Bill Status


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

actions

  • 09 / Jan / 2013
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 04 / Feb / 2013
    • AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 04 / Feb / 2013
    • PRINT NUMBER 1958A
  • 05 / Jun / 2013
    • AMEND (T) AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 05 / Jun / 2013
    • PRINT NUMBER 1958B
  • 18 / Jun / 2013
    • AMEND (T) AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 18 / Jun / 2013
    • PRINT NUMBER 1958C
  • 21 / Jun / 2013
    • COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • 21 / Jun / 2013
    • ORDERED TO THIRD READING CAL.1576
  • 21 / Jun / 2013
    • PASSED SENATE
  • 21 / Jun / 2013
    • DELIVERED TO ASSEMBLY
  • 21 / Jun / 2013
    • REFERRED TO WAYS AND MEANS
  • 08 / Jan / 2014
    • DIED IN ASSEMBLY
  • 08 / Jan / 2014
    • RETURNED TO SENATE
  • 08 / Jan / 2014
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 19 / Feb / 2014
    • AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 19 / Feb / 2014
    • PRINT NUMBER 1958D

Summary

Increases the presumed "cost of the agent" for purposes of cigarette marketing; establishes the cigarette tax enforcement account; makes an appropriation from such account to support cigarette tax enforcement activities.

do you support this bill?

Bill Details

See Assembly Version of this Bill:
A8054
Versions:
S1958
S1958A
S1958B
S1958C
S1958D
Legislative Cycle:
2013-2014
Current Committee:
Senate Investigations And Government Operations
Law Section:
Tax Law
Laws Affected:
Amd §§483 & 472 & 482, Tax L; add §92-gg, St Fin L
Versions Introduced in Previous Legislative Cycles:
2011-2012: S4736A
2009-2010: S8428

Sponsor Memo

BILL NUMBER:S1958B

TITLE OF BILL: An act to amend the tax law, in relation to increasing
the presumed "cost of the agent" relating to cigarette marketing
standards; and to amend the state finance law, in relation to
establishing the cigarette tax enforcement fund

PURPOSE: This bill increases the presumed "cost to the agent" for
purposes of Cigarette Marketing Standards Act and establishes the
Cigarette Tax Enforcement Fund.

SUMMARY OF PROVISIONS:

Section one of the bill amends subparagraph (B) of paragraph 1 of
subdivision (b) of section 483 of the Tax Law, as amended by chapter.
1 of the laws of 1999, to provide that the presumed cost of doing
business by the agent. selling to a wholesale dealer shall increase
from seven-eighths of one percent of the basic cost of cigarettes plus
two cents to seven-eighths of one percent of the basic cost of
cigarettes plus seventeen cents for a standard pack of 20 cigarettes.
For sales to chain stores, the presumed cost of doing business shall
increase from one and one-half percent of the basic cost of cigarettes
plus two cents to one and one-half percent of the basic cost of
cigarettes plus seventeen cents for a standard pack of 20 cigarettes.
For sales to retail dealers, the presumed cost. of doing business
shall increase from three and seven-eighths percent of the basic cost
of cigarettes plus two cents to three and seven-eighths percent of the
basic cost of cigarettes plus seventeen cents for a standard pack of
20 cigarettes.

Section two of the bill amends subdivision 1 of section 472 of the Tax
Law to provide that the cost of a stamp shall be increased by three
cents and that the three cents shall be deposited in the Cigarette Tax
Enforcement Fund.

Section three of the bill amends section 482 of the Tax Law to provide
that three cents collected from the sale of each cigarette stamp
pursuant to Tax Law section 472(1) shall be deposited in the Cigarette
Tax Enforcement Fund.

Section four of the bill adds new section 99-gg to the State Finance
Law creating the Cigarette Tax Enforcement Fund. The fund is in the
joint custody of the Comptroller and the Commissioner of the
Department of taxation and Finance. Monies from the fund, following
appropriation by the Legislature, shall be expended for the
enforcement of the State's cigarette tax and the cigarette marketing
standards established pursuant to Article 20A of the Tax Law.

Section five of the bill provides that this act shall take effect on
the first day of the sales tax quarterly period, as described in
subdivision (b) of section 1136 of the tax law, next succeeding the
90th day after it shall have become law and shall apply in accordance
with the applicable transitional provisions of sections 1106 and 1217
of the tax law.

EXISTING LAW: Currently, for a standard pack of twenty cigarettes,
the cost of agent for sales from an agent to a wholesaler, chain


store, or retailer is a percentage of the basic cost of cigarettes
plus two cents.

JUSTIFICATION: The "presumed cost of doing business" for cigarette
stamping agents, which was enacted to help defer the cost of acting as
the State's agent for the collection of the cigarette excise tax, has
not increased 1999. Since 1999, the cigarette excise tax has increased
almost three hundred percent, which stamping agents are required to
prepay. This prepayment burden, in addition to a variety of other
factors, has caused the cost of doing business for cigarette stamping
agents to well exceed the "presumed cost of doing business" provided
by the Tax Law. To bring the "presumed cost of doing business" more in
line with the actual cost of doing business, the "presumed cost of
doing business" requires an adjustment. The "presumed cost of doing
business" will be adjusted from a percentage of the basic cost of
cigarettes plus two cents to a percentage of the basic cost of
cigarettes plus seventeen cents per pack, regardless of the number of
cigarettes in a pack.

Included in this increase is a three cent concurrent expense that will
be added to the price of a cigarette stamp. The three cents collected
on each stamp will be used to fund the Cigarette Tax Enforcement.
Fund that is established by this bill,. The Cigarette Tax Enforcement.
Fund will be used to enforce the State's cigarette tax and the
cigarette marketing standards provisions of Tax Law Article 20-A.

LEGISLATIVE HISTORY: Similar to: 2011-2: S.4763-A - Passed Senate
both years

FISCAL IMPLICATIONS: By increasing the minimum price of cigarettes
sold in New York, the State will collect increased sales tax revenues.
Additionally, an increase in enforcement of the cigarette marketing
standards and the cigarette tax will increase revenue to the State.

EFFECTIVE DATE: This act shall take effect. on the first day of the
sales tax quarterly period, as described in subdivision (b) of section
1136 of the tax law, next succeeding the 90th day after it shall have
become law and shall apply in accordance with the applicable
transitional provisions of sections 1106 and 1217 of the tax law.

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

                                 1958--B

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment  Operations  --  committee  discharged,  bill  amended,   ordered
  reprinted  as  amended  and recommitted to said committee -- committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

AN ACT to amend the tax law, in  relation  to  increasing  the  presumed
  "cost  of the agent" relating to cigarette marketing standards; and to
  amend the state finance law, in relation to establishing the cigarette
  tax enforcement fund

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

  Section  1.  Subparagraph  (B)  of  paragraph  1 of subdivision (b) of
section 483 of the tax law, as amended by chapter 1 of the laws of 1999,
is amended to read as follows:
  (B) In the absence of the filing with the commissioner of satisfactory
proof of a lesser cost of doing business of the agent making  the  sale,
the  cost  of doing business by the agent shall be presumed to be seven-
eighths of one percent of the basic cost  of  cigarettes  for  sales  to
wholesale  dealers  plus [one cent] SEVENTEEN CENTS per package of [ten]
cigarettes, [two cents per package of twenty cigarettes and in the  case
of  a package containing more than twenty cigarettes, two cents and one-
half of a cent for each five cigarettes in excess of twenty  cigarettes]
REGARDLESS  OF  THE  NUMBER OF CIGARETTES CONTAINED IN SUCH PACKAGE, one
and one-half percent of the basic cost of cigarettes for sales to  chain
stores  plus [one cent] SEVENTEEN CENTS per package of [ten] cigarettes,
[two cents per package of twenty cigarettes and in the case of a package
containing more than twenty cigarettes, two cents and one-half of a cent
for each five cigarettes in excess of twenty cigarettes]  REGARDLESS  OF
THE  NUMBER  OF  CIGARETTES  CONTAINED  IN  SUCH  PACKAGE, and three and

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02219-05-3

S. 1958--B                          2

seven-eighths percent of the basic cost of cigarettes  with  respect  to
sales  to  retail dealers plus [one cent] SEVENTEEN CENTS per package of
[ten] cigarettes, [two cents per package of twenty cigarettes and in the
case  of a package containing more than twenty cigarettes, two cents and
one-half of a cent for each five cigarettes in excess  of  twenty  ciga-
rettes]  REGARDLESS  OF THE NUMBER OF CIGARETTES IN SUCH PACKAGE and the
foregoing cents per pack shall be included in the "cost of  doing  busi-
ness  by  the  agent"  referred  to  in paragraphs two and three of this
subdivision.
  S 2. Subdivision 1 of section 472 of the tax law, as amended by  chap-
ter  629  of  the  laws of 1996 and as further amended by section 104 of
part A of chapter 62 of the laws of 2011, is amended to read as follows:
  1. The commissioner shall prescribe, prepare  and  furnish  stamps  of
such denominations and quantities as may be necessary for the payment of
the  tax on cigarettes imposed by this article PLUS A CONCURRENT EXPENSE
ALLOWANCE FOR THE CIGARETTE TAX ENFORCEMENT  FUND  OF  THREE  CENTS  PER
STAMP  WHICH  SHALL  BE DEPOSITED PURSUANT TO SUBDIVISION (C) OF SECTION
FOUR HUNDRED EIGHTY-TWO OF THIS ARTICLE, and may from time to  time  and
as  often  as  he deems advisable provide for the issuance and exclusive
use of stamps of a new design and forbid the use of stamps of any  other
design,  in  the  manner  and  with  the  effect provided in section two
hundred seventy-four  of  this  chapter.  The  commissioner  shall  make
provisions  for the sale of such stamps at such places and at such times
as he may deem necessary and may license agents for  such  purpose.  The
commissioner  may  license  dealers in cigarettes, who maintain separate
warehousing facilities for the purpose  of  receiving  and  distributing
cigarettes  and conducting their business, who have received commitments
from at least two cigarette manufacturers whose aggregate  market  share
is  at  least  forty percent of the New York state cigarette market, and
importers, exporters and manufacturers of cigarettes, and other  persons
within  or without the state as agents to buy or affix stamps to be used
in paying the tax herein imposed, but an agent shall at all  times  have
the right to appoint the person in his employ who is to affix the stamps
to  any  cigarettes  under  the agent's control. The fee for filing such
application for an agent's license shall be one  thousand  five  hundred
dollars,  unless  such  fee  has  been  paid during the preceding twelve
months, in which case, the fee for a new license shall be  one  thousand
dollars.  All  of  the provisions of section four hundred eighty OF THIS
ARTICLE relating to wholesale dealers' licenses, including the procedure
for suspension, revocation, refusal to license and for hearings,  except
for  paragraphs (c) and (g) of subdivision one of such section, shall be
applicable to agents' licenses applied for or granted pursuant  to  this
section, as if such provisions had been set forth in full in this subdi-
vision  and  had  expressly referred to the applicant for, or the holder
of, an agent's license. Whenever the commissioner shall sell and deliver
to any such agent any such stamps,  such  agent  shall  be  entitled  to
receive  as  compensation for his services and expenses as such agent in
selling or affixing such stamps, and to retain out of the moneys  to  be
paid  by him for such stamps, a commission on the par value thereof. The
commissioner is hereby authorized to prescribe  a  schedule  of  commis-
sions, not exceeding five per centum, allowable to such agent for buying
and affixing such stamps. Such schedule shall be uniform with respect to
the different types of stamps used, and may be on a graduated scale with
respect  to the number of stamps purchased. The commissioner may, in his
discretion, permit an agent to pay for such stamps  within  thirty  days
after  the  date of purchase and may require any such agent to file with

S. 1958--B                          3

the department [of taxation and finance]  a  bond  issued  by  a  surety
company  approved  by  the  superintendent  of  financial services as to
solvency and responsibility and authorized to transact business  in  the
state  or  other security acceptable to the commissioner, in such amount
as the commissioner may fix, to secure the payment of any sums due  from
such  agent  pursuant  to  this  article. If securities are deposited as
security under this subdivision, such securities shall be  kept  in  the
custody  of  the  commissioner and may be sold by the commissioner if it
becomes necessary so to do in order to recover any sums  due  from  such
agent  pursuant  to  this  article,  but no such sale shall be had until
after such agent shall have had opportunity to litigate the validity  of
any  tax if it elects so to do. Upon any such sale, the surplus, if any,
above the sums due under this article shall be returned to such agent.
  S 3. Section 482 of the tax law, as amended by section 2 of part T  of
chapter 61 of the laws of 2011, is amended to read as follows:
  S 482. Deposit and disposition of revenue. (a) All taxes, fees, inter-
est  and  penalties collected or received by the commissioner under this
article and article twenty-A of this  chapter  shall  be  deposited  and
disposed  of  pursuant to the provisions of section one hundred seventy-
one-a of this chapter.  (b)  From  the  taxes,  interest  and  penalties
collected  or  received  by the commissioner under sections four hundred
seventy-one and four hundred seventy-one-a of this article, effective on
and  after  March  first,  two  thousand,  forty-nine   and   fifty-five
hundredths, and effective on and after February first, two thousand two,
forty-three  and  seventy  hundredths;  and  effective  on and after May
first, two thousand  two,  sixty-four  and  fifty-five  hundredths;  and
effective  on  and  after April first, two thousand three, sixty-one and
twenty-two hundredths percent; and effective on and  after  June  third,
two  thousand  eight,  seventy  and  sixty-three hundredths percent; and
effective on and after July first, two thousand ten, seventy-six percent
collected or received under those sections  must  be  deposited  to  the
credit  of  the  tobacco  control  and  insurance initiatives pool to be
established and distributed by the commissioner of health in  accordance
with section twenty-eight hundred seven-v of the public health law.  (C)
FROM  THE  AMOUNTS  RECEIVED PURSUANT TO SUBDIVISION ONE OF SECTION FOUR
HUNDRED SEVENTY-TWO OF THIS ARTICLE, THE COMMISSIONER SHALL  DEPOSIT  IN
THE CIGARETTE TAX ENFORCEMENT FUND ESTABLISHED PURSUANT TO SECTION NINE-
TY-TWO-GG  OF THE STATE FINANCE LAW THE CONCURRENT EXPENSE ALLOWANCE FOR
THE CIGARETTE TAX ENFORCEMENT FUND OF THREE CENTS PER STAMP.
  S 4. The state finance law is amended by adding a new section 92-gg to
read as follows:
  S 92-GG. CIGARETTE TAX ENFORCEMENT FUND. 1.  THERE  IS  HEREBY  ESTAB-
LISHED  IN  THE JOINT CUSTODY OF THE COMPTROLLER AND THE COMMISSIONER OF
TAXATION AND FINANCE A SPECIAL FUND TO BE KNOWN AS  THE  "CIGARETTE  TAX
ENFORCEMENT FUND".
  2.  SUCH FUND SHALL CONSIST OF ALL REVENUES RECEIVED BY THE DEPARTMENT
OF TAXATION AND FINANCE PURSUANT  TO  THE  PROVISIONS  OF  SECTION  FOUR
HUNDRED  EIGHTY-TWO  OF  THE  TAX  LAW AND ALL OTHER MONEY APPROPRIATED,
CREDITED, OR TRANSFERRED THERETO FROM ANY OTHER FUND OR SOURCE  PURSUANT
TO LAW.
  3. MONIES OF THE FUND SHALL BE EXPENDED ONLY FOR COSTS ASSOCIATED WITH
THE  STATE'S  ENFORCEMENT OF THE STATE'S CIGARETTE TAX AND THE CIGARETTE
MARKETING STANDARDS UNDER ARTICLE TWENTY-A OF THE TAX LAW.
  4. MONIES OF THE ACCOUNT, FOLLOWING APPROPRIATION BY THE  LEGISLATURE,
SHALL BE ALLOCATED UPON A CERTIFICATE OF APPROVAL OF AVAILABILITY BY THE
DIRECTOR OF THE BUDGET FOR THE PURPOSES SET FORTH IN THIS SECTION.

S. 1958--B                          4

  S  5.  This  act  shall  take effect on the first day of the sales tax
quarterly period, as described in subdivision (b) of section 1136 of the
tax law, next succeeding the ninetieth day after it shall have become  a
law  and  shall  apply  in  accordance  with the applicable transitional
provisions of sections 1106 and 1217 of the tax law.

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.