Senate Bill S5761

2011-2012 Legislative Session

Increases the presumed "cost of the agent" for purposes of cigarette marketing

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Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 04, 2012	referred to investigations and government operations
Jun 14, 2011	referred to rules

2011-S5761 (ACTIVE) - Details

Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Amd §483, Tax L

2011-S5761 (ACTIVE) - Summary

Increases the presumed "cost of the agent" for purposes of cigarette marketing.

2011-S5761 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S5761

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

PURPOSE:
Increases the presumed "cost to the agent" for purposes of cigarette
marketing.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1: 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
fourteen 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 fourteen 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 fourteen cents for a standard pack of 20 cigarettes.

section 2: Amends subparagraph (B) of paragraph 2 of subdivisions (b)
of section 483 of the tax law, as amended by chapter 4 of the laws of
1988 to by changing the minimum price percentages of wholesale
dealers making cigarette sales to retail dealers and chain stores.

Section 3: Effective date.

JUSTIFICATION:
Increased cigarette and tobacco excise taxes and the burden of
pre-payment of cigarette sales taxes, which have increased eight-fold
since the inception in addition to a variety of other factors, have
caused the "presumed cost of doing business" of the tax agents to
require an adjustment of 12 cents to the 15 year old handling fee of
2 cents per pack of 20 cigarettes. This will enable the remaining tax
agents to remain in business and help secure tax collection.

Note: In each instance where a pack contains 20 cigarettes, the
increase is from two cents to fourteen cents. Where a pack contains
25 cigarettes, the handling fee is increased from two cents
to seventeen cents. Where a pack contains 10 cigarettes,
the handling fee is increased from one cent to seven cents.

PRIOR LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
The increase in handling fees will preserve the almost Two Billion
Dollars in revenue that the Cigarette Tax Agents collect for the


State of New York every year and will ensure viability of the excise
tax collection process which has been severely damaged by the
increased costs of doing business and the loss of volume due to sales
by illegal untaxed sources. By not increasing the handling fees, the
State of New York may risk losing even more of its Cigarette Tax
Agents and thereby further deteriorate the tax collection methodology
expressed in Article 483 of the Tax Code. A further deterioration of
the tax collection process will lead to less revenue collected and
more cartons sold through illegal untaxed Sources. Furthermore, this
slight increase of 12 cents per pack of 20 cigarettes will have no
effect on the amount of taxed cartons sold within the State of New
York.

EFFECTIVE DATE:
This act shall take effect July 1, 2011; provided, however, that if
this act shall not have become a law on or before July 1, 2011, then
this act shall take effect immediately and shall be deemed to have
been in full force and effect on and after July 1, 2011.

2011-S5761 (ACTIVE) - Bill Text download pdf

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

                                  5761

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                              June 14, 2011
                               ___________

Introduced  by COMMITTEE ON RULES -- read twice and ordered printed, and
  when printed to be committed to the Committee on Rules

AN ACT to amend the tax law, in  relation  to  increasing  the  presumed
  "cost of the agent" relating to cigarette marketing standards

  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] SEVEN CENTS per package of  ten  ciga-
rettes, [two] FOURTEEN cents per package of twenty cigarettes and in the
case of a package containing more than twenty cigarettes, [two] FOURTEEN
cents and one-half of a cent for each five cigarettes in excess of twen-
ty  cigarettes, one and one-half percent of the basic cost of cigarettes
for sales to chain stores plus [one cent] SEVEN CENTS per package of ten
cigarettes, [two] FOURTEEN cents per package of twenty cigarettes and in
the case of a package containing  more  than  twenty  cigarettes,  [two]
FOURTEEN cents and one-half of a cent for each five cigarettes in excess
of  twenty  cigarettes  and three and seven-eighths percent of the basic
cost of cigarettes with respect to sales to  retail  dealers  plus  [one
cent]  SEVEN  CENTS  per package of ten cigarettes, [two] FOURTEEN cents
per package of twenty cigarettes and in the case of a package containing
more than twenty cigarettes, [two] FOURTEEN cents and one-half of a cent
for each five cigarettes in excess of twenty cigarettes and the  forego-
ing  cents  per pack shall be included in the "cost of doing business by
the agent" referred to in paragraphs two and three of this subdivision.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13098-01-1

S. 5761                             2

  S 2. Subparagraph (B) of paragraph 2 of subdivision (b) of section 483
of the tax law, as amended by chapter 4 of the laws of 1988, is  amended
to read as follows:
  (B) In the absence of the filing with the [tax commission] COMMISSION-
ER  of  satisfactory  proof  of  a  lesser cost of doing business of the
wholesale dealer making the sale, the cost  of  doing  business  by  the
wholesale  dealer  with  respect  to  sales  to  retail dealers shall be
presumed to be [three per centum] TWO AND  EIGHTY-EIGHT  ONE  HUNDREDTHS
PERCENT  of  the  basic cost of cigarettes, and with respect to sales to
chain stores, [five-eighths of one percent] SIXTH-TENTHS OF ONE  PERCENT
of the basic cost of cigarettes.
  S  3. This act shall take effect July 1, 2011; provided, however, that
if this act shall not have become a law on or before July 1, 2011,  then
this  act shall take effect immediately and shall be deemed to have been
in full force and effect on and after July 1, 2011.

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Senate Bill S5761

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Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

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2011-S5761 (ACTIVE) - Details

2011-S5761 (ACTIVE) - Summary

2011-S5761 (ACTIVE) - Sponsor Memo

2011-S5761 (ACTIVE) - Bill Text download pdf

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Sponsored By

Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

Actions

2011-S5761 (ACTIVE) - Details

2011-S5761 (ACTIVE) - Summary

2011-S5761 (ACTIVE) - Sponsor Memo

2011-S5761 (ACTIVE) - Bill Text download pdf

Comments