senate Bill S2401

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

  • 17 / Jan / 2013
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 08 / Jan / 2014
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 03 / Feb / 2014
    • RECOMMIT, ENACTING CLAUSE STRICKEN

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

Versions:
S2401
Legislative Cycle:
2013-2014
Current Committee:
Senate Investigations And Government Operations
Law Section:
Tax Law
Laws Affected:
Amd ยง471, Tax L
Versions Introduced in Previous Legislative Cycles:
2011-2012: S2008A
2009-2010: S8496

Sponsor Memo

BILL NUMBER:S2401

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: 2011-12 S. 2008a - Investigations & Government
Operations/A. 1101a - 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
________________________________________________________________________

                                  2401

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 17, 2013
                               ___________

Introduced  by  Sens.  GRIFFO, LARKIN -- read twice and ordered printed,
  and when printed to be committed to the  Committee  on  Investigations
  and Government Operations

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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06444-01-3

S. 2401                             2

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 FOURTEEN, 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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