senate Bill S1958C

2013-2014 Legislative Session

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

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Archive: Last Bill Status - In Committee


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Feb 19, 2014 print number 1958d
amend and recommit to investigations and government operations
Jan 08, 2014 referred to investigations and government operations
returned to senate
died in assembly
Jun 21, 2013 referred to ways and means
delivered to assembly
passed senate
ordered to third reading cal.1576
committee discharged and committed to rules
Jun 18, 2013 print number 1958c
amend (t) and recommit to investigations and government operations
Jun 05, 2013 print number 1958b
amend (t) and recommit to investigations and government operations
Feb 04, 2013 print number 1958a
amend and recommit to investigations and government operations
Jan 09, 2013 referred to investigations and government operations

Votes

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Bill Amendments

Original
A
B
C
D (Active)
Original
A
B
C
D (Active)

S1958 - Bill Details

See Assembly Version of this Bill:
A8054A
Current Committee:
Law Section:
Tax Law
Laws Affected:
Amd §§483, 472 & 482, Tax L; add §97-nnnn, St Fin L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S4736A
2009-2010: S8428

S1958 - Bill Texts

view 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.

view sponsor memo
BILL NUMBER:S1958

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:
The purpose of this bill is to increase the presumed "cost to the
agent" for purposes of cigarette marketing.

SUMMARY OF 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: Effective date.

EXISTING LAW:
Amends subparagraph (B) of paragraph 1 of subdivision (b) of section
483 of the tax law.

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.

LEGISLATIVE HISTORY:
S.4736A of 2011 - Passed Senate 06/12/12

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.

LOCAL FISCAL IMPLICATIONS:

EFFECTIVE DATE:
This act shall take effect July 1, 2013; provided, however, that if
this act shall not have become a law on or before July 1, 2013, then
this act shall take effect immediately and shall be deemed to have
been in full force and effect on and after July 1, 2013.

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

                                  1958

                       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

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] SEVEN-
TEEN cents and one-half of a cent for each five cigarettes in excess  of
twenty  cigarettes,  one and one-half percent of the basic cost of ciga-
rettes for sales to chain stores plus [one cent] SIX CENTS  per  package
of  ten  cigarettes, [two] TWELVE cents per package of twenty cigarettes
and in the case of a package containing  more  than  twenty  cigarettes,
[two] SEVENTEEN 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]  SIX CENTS per package of ten cigarettes, [two] TWELVE cents
per package of twenty cigarettes and in the case of a package containing
more than twenty cigarettes, [two] SEVENTEEN cents  and  one-half  of  a
cent  for  each  five  cigarettes in excess of twenty cigarettes and the
foregoing cents per pack shall be included in the "cost of  doing  busi-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02219-01-3

S. 1958                             2

ness  by  the  agent"  referred  to  in paragraphs two and three of this
subdivision.
  S  2. This act shall take effect July 1, 2013; provided, however, that
if this act shall not have become a law on or before July 1, 2013,  then
this  act shall take effect immediately and shall be deemed to have been
in full force and effect on and after July 1, 2013.

S1958A - Bill Details

See Assembly Version of this Bill:
A8054A
Current Committee:
Law Section:
Tax Law
Laws Affected:
Amd §§483, 472 & 482, Tax L; add §97-nnnn, St Fin L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S4736A
2009-2010: S8428

S1958A - Bill Texts

view 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.

view sponsor memo
BILL NUMBER:S1958A

TITLE OF BILL: An act to amend the tax law, in relation to increasing
the presumed "cost of the agent" relating to cigarette marketing stand-
ards

PURPOSE: This bill increases the presumed "cost to the agent" for
purposes of Cigarette Marketing Standards Act.

SUMMARY OF 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 stand-
ard 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 stand-
ard pack of 20 cigarettes.

Section 2: Effective date.

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 two cents to twelve cents per pack of twenty ciga-
rettes, with corresponding adjustments for packages of ten and twenty-
five cigarettes. This increase will enable the stamping agents to remain
in business and help secure tax collection.

Note: In each instance where a pack contains twenty cigarettes, the
increase is from two cents to fourteen cents. Where a pack contains

twenty-five cigarettes, the handling fee is increased from two cents to
seventeen cents. Where a pack contains ten cigarettes, the handling fee
is increased from one cent to seven cents.

LEGISLATIVE HISTORY: 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.

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 transi-
tional provisions of sections 1106 and 1217 of the tax law.

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

                                 1958--A

                       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

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]  SEVEN-
TEEN  cents and one-half of a cent for each five cigarettes in excess of
twenty cigarettes, one and one-half percent of the basic cost  of  ciga-
rettes  for  sales to chain stores plus [one cent] SIX CENTS per package
of ten cigarettes, [two] TWELVE cents per package of  twenty  cigarettes
and  in  the  case  of a package containing more than twenty cigarettes,
[two] SEVENTEEN 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] SIX CENTS per package of ten cigarettes, [two]  TWELVE  cents
per package of twenty cigarettes and in the case of a package containing
more  than  twenty  cigarettes,  [two] SEVENTEEN cents and one-half of a
cent for each five cigarettes in excess of  twenty  cigarettes  and  the

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02219-02-3

S. 1958--A                          2

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.  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.

S1958B - Bill Details

See Assembly Version of this Bill:
A8054A
Current Committee:
Law Section:
Tax Law
Laws Affected:
Amd §§483, 472 & 482, Tax L; add §97-nnnn, St Fin L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S4736A
2009-2010: S8428

S1958B - Bill Texts

view 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.

view 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.

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                    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.

S1958C - Bill Details

See Assembly Version of this Bill:
A8054A
Current Committee:
Law Section:
Tax Law
Laws Affected:
Amd §§483, 472 & 482, Tax L; add §97-nnnn, St Fin L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S4736A
2009-2010: S8428

S1958C - Bill Texts

view 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.

view sponsor memo
BILL NUMBER:S1958C REVISED 6/19/13

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 account; and making an
appropriation therefor

PURPOSE: This bill increases the presumed "cost to the agent" for
purposes of Cigarette Marketing Standards Act.

SUMMARY OF 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 nine
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 nine 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 nine cents for a standard pack of 20 cigarettes.

Section 2 provides that this act shall take effect September 1, 2013
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 two cents to twelve cents per pack of
twenty cigarettes, with corresponding adjustments for packages of ten
and twenty-five cigarettes. This increase will enable the stamping
agents to remain in business and help secure tax collection.

Note: In each instance where a pack contains twenty cigarettes, the
increase is from two cents to nine cents. Where a pack contains
twenty-five cigarettes, the handling fee is increased from two cents


to nine cents. Where a pack contains ten cigarettes, the handling fee
is increased from one cent to nine cents.

LEGISLATIVE HISTORY: 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.

EFFECTIVE DATE: This act shall take effect September 1, 2013 and
shall apply in accordance with the applicable transitional provisions
of sections 1106 and 1217 of the tax law.

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

                                 1958--C

                       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  --  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 account; and making an appropriation therefor

  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] NINE CENTS per package of [ten]  ciga-
rettes, [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] NINE 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02219-07-3

S. 1958--C                          2

THE NUMBER OF CIGARETTES  CONTAINED  IN  SUCH  PACKAGE,  and  three  and
seven-eighths  percent  of  the basic cost of cigarettes with respect to
sales to retail dealers plus [one cent] NINE 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 IN SUCH PACKAGE and the foregoing
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.
  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 THE  PAYMENT  BY  THE
AGENT  OF  A CONCURRENT EXPENSE ALLOWANCE FOR THE CIGARETTE TAX ENFORCE-
MENT ACCOUNT ESTABLISHED PURSUANT TO SECTION  NINETY-SEVEN-NNNN  OF  THE
STATE  FINANCE  LAW  OF  FOUR  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  receiv-
ing  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  ciga-
rettes,  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 deal-
ers' 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  subdivision  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 commissions, not exceed-
ing five per centum, allowable to such agent  for  buying  and  affixing
such  stamps. Such schedule shall be uniform with respect to the differ-
ent types of stamps used, and may be on a graduated scale  with  respect
to  the  number  of  stamps  purchased.  The  commissioner  may,  in his

S. 1958--C                          3

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
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 ACCOUNT ESTABLISHED PURSUANT TO SECTION
NINETY-SEVEN-NNNN OF THE STATE FINANCE LAW THE CONCURRENT EXPENSE ALLOW-
ANCE FOR THE CIGARETTE TAX ENFORCEMENT FUND OF FOUR CENTS PER STAMP.
  S 4. The state finance law is amended by adding a new section  97-nnnn
to read as follows:
  S  97-NNNN.  CIGARETTE  TAX  ENFORCEMENT  ACCOUNT.  1. THERE IS HEREBY
CREATED IN THE JOINT CUSTODY OF THE STATE COMPTROLLER  AND  THE  COMMIS-
SIONER  OF  TAXATION AND FINANCE AN ACCOUNT OF THE MISCELLANEOUS SPECIAL
REVENUE FUND TO BE KNOWN AS THE "CIGARETTE TAX ENFORCEMENT ACCOUNT".
  2. NOTWITHSTANDING ANY OTHER LAW, RULE OR REGULATION TO THE  CONTRARY,
THE  STATE  COMPTROLLER IS HEREBY AUTHORIZED AND DIRECTED TO RECEIVE FOR
DEPOSIT TO THE CREDIT OF THE CIGARETTE TAX  ENFORCEMENT  ACCOUNT  MONIES
RECEIVED  FROM THE COMMISSIONER OF TAXATION AND FINANCE FROM THE CONCUR-
RENT EXPENSE ALLOWANCE PAID PURSUANT TO SUBDIVISION ONE OF SECTION  FOUR
HUNDRED SEVENTY-TWO OF THE TAX LAW, AND OTHER MONIES APPROPRIATED, CRED-
ITED OR TRANSFERRED THERETO FROM ANY OTHER FUND OR SOURCE.

S. 1958--C                          4

  3. THE PROCEEDS OF THE CIGARETTE TAX ENFORCEMENT ACCOUNT SHALL BE USED
SOLELY  TO  ENFORCE THE COLLECTION OF THE CIGARETTE TAX, AS PROVIDED FOR
IN ARTICLE TWENTY OF THE TAX LAW.
  S  5. There is hereby appropriated to the division of state police the
amount of six  million  dollars  ($6,000,000)  from  the  cigarette  tax
enforcement  account  to  support  cigarette tax enforcement activities.
This appropriation may be apportioned to either the patrol activities or
criminal investigation activities  program  of  the  division  of  state
police,  may be transferred or suballocated to any other state agency or
public authority for their costs associated with the enforcement of  the
cigarette  tax, and may be used to contract with local enforcement agen-
cies for cigarette tax enforcement activities. No monies shall be avail-
able from this appropriation absent a certificate of allocation from the
director of the budget.
  S 6. This act shall take effect September 1, 2013 and shall  apply  in
accordance  with the applicable transitional provisions of sections 1106
and 1217 of the tax law.

S1958D (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A8054A
Current Committee:
Law Section:
Tax Law
Laws Affected:
Amd §§483, 472 & 482, Tax L; add §97-nnnn, St Fin L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S4736A
2009-2010: S8428

S1958D (ACTIVE) - Bill Texts

view 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.

view sponsor memo
BILL NUMBER:S1958D

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 account; and making an
appropriation therefor

PURPOSE:

This bill increases the presumed "cost to the agent" for purposes of
Cigarette Marketing Standards Act.

SUMMARY OF PROVISIONS:

Section 1 amends subparagraph (B) of paragraph 1 of subdivision (b) of
section 483 of the Tax Law to provide that the presumed cost of doing
business by the agent selling to a wholesale dealer shell 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 nine cents regardless of the number of cigarettes
contained in the package. 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 nine cents regardless of the number
of cigarettes contained in the package. 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 nine cents regardless of the number of cigarettes in a package.

Section 2 amends subdivision 1 of section 472 of the tax law to allow
the commissioner to prescribe, prepare and furnish stamps for the
payment by the agent of a concurrent expense allowance for the
cigarette enforcement account of four cents per stamp which shall be
deposited pursuant to subdivision (c) of section four hundred
eighty-two of this article.

Section 3 amends section 482 of the tax law through the addition of a
subparagraph (c) which provides that the commissioner shall deposit
all taxes, fees, interest and penalties collected ore received from
the amount received pursuant to subdivision one of section four
hundred seventy-two of this article, the commissioner shall deposit
the cigarette tax enforcement account established Pursuant to section
ninety-seven-oooo of the state finance law to the concurrent expense
allowance for the cigarette tax enforcement fund of four cents per
stamp.

Section 4 amends the State Finance law by adding a new section 97-oooo
to establish the Cigarette tax enforcement account which shall be in
joint custody under the purview of the State Comptroller and the
Commissioner of taxation and finance. The State Comptroller is
authorized and directed to receive for deposit to the credit of the
cigarette tax enforcement account monies received from the
commissioner of taxation and finance from the concurrent expense
allowance and other monies appropriated, credited or transferred
thereto from any other fund or source. The proceeds of the cigarette


tax enforcement account shall be used just to enforce the collection
of the cigarette tax.

Section 5 appropriates to the division of the state police six million
dollars from the cigarette tax enforcement account to support
cigarette tax enforcement activities and proscribes other methods in
which the appropriation may be used in efforts to enforce the
cigarette tax.

Section 6 provides that this act shall take effect September 1, 2014
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 for wholesale dealers from one cent to nine
cents regardless of the number of cigarettes contained in such
package, for chain stores the change goes from one cent to nine cents
regardless of the number of cigarettes contained in a package and for
retail dealers the change goes from one cent to nine cents regardless
of the number of cigarettes contained in the package. This increase
will enable the stamping agents to remain in business and help secure
tax collection.

LEGISLATIVE HISTORY:

2013: S.1958C - Passed Senate
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.

EFFECTIVE DATE:

This act shall take effect September 1, 2014 and shall apply in
accordance with the applicable transitional provisions of sections
1106 and 1217 of the tax law.


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

                                 1958--D

                       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  --  committee  discharged,  bill  amended,  ordered
  reprinted  as amended and recommitted to said committee -- recommitted
  to the  Committee  on  Investigations  and  Government  Operations  in
  accordance  with  Senate  Rule 6, sec. 8 -- committee discharged, bill
  amended, ordered reprinted as amended and recommitted to said  commit-
  tee

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 account; and making an appropriation therefor

  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] NINE CENTS per package of [ten]  ciga-
rettes, [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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02219-09-4

S. 1958--D                          2

stores  plus [one cent] NINE 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
seven-eighths  percent  of  the basic cost of cigarettes with respect to
sales to retail dealers plus [one cent] NINE 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 IN SUCH PACKAGE and the foregoing
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.
  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 THE  PAYMENT  BY  THE
AGENT  OF  A CONCURRENT EXPENSE ALLOWANCE FOR THE CIGARETTE TAX ENFORCE-
MENT ACCOUNT ESTABLISHED PURSUANT TO SECTION  NINETY-SEVEN-OOOO  OF  THE
STATE  FINANCE  LAW  OF  FOUR  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  receiv-
ing  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  ciga-
rettes,  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 deal-
ers' 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  subdivision  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 commissions, not exceed-

S. 1958--D                          3

ing five per centum, allowable to such agent  for  buying  and  affixing
such  stamps. Such schedule shall be uniform with respect to the differ-
ent 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
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 ACCOUNT ESTABLISHED PURSUANT TO SECTION
NINETY-SEVEN-OOOO OF THE STATE FINANCE LAW THE CONCURRENT EXPENSE ALLOW-
ANCE FOR THE CIGARETTE TAX ENFORCEMENT FUND OF FOUR CENTS PER STAMP.
  S 4. The state finance law is amended by adding a new section  97-oooo
to read as follows:
  S  97-OOOO.  CIGARETTE  TAX  ENFORCEMENT  ACCOUNT.  1. THERE IS HEREBY
CREATED IN THE JOINT CUSTODY OF THE STATE COMPTROLLER  AND  THE  COMMIS-
SIONER  OF  TAXATION AND FINANCE AN ACCOUNT OF THE MISCELLANEOUS SPECIAL
REVENUE FUND TO BE KNOWN AS THE "CIGARETTE TAX ENFORCEMENT ACCOUNT".
  2. NOTWITHSTANDING ANY OTHER LAW, RULE OR REGULATION TO THE  CONTRARY,
THE  STATE  COMPTROLLER IS HEREBY AUTHORIZED AND DIRECTED TO RECEIVE FOR
DEPOSIT TO THE CREDIT OF THE CIGARETTE TAX  ENFORCEMENT  ACCOUNT  MONIES
RECEIVED  FROM THE COMMISSIONER OF TAXATION AND FINANCE FROM THE CONCUR-
RENT EXPENSE ALLOWANCE PAID PURSUANT TO SUBDIVISION ONE OF SECTION  FOUR

S. 1958--D                          4

HUNDRED SEVENTY-TWO OF THE TAX LAW, AND OTHER MONIES APPROPRIATED, CRED-
ITED OR TRANSFERRED THERETO FROM ANY OTHER FUND OR SOURCE.
  3. THE PROCEEDS OF THE CIGARETTE TAX ENFORCEMENT ACCOUNT SHALL BE USED
SOLELY  TO  ENFORCE THE COLLECTION OF THE CIGARETTE TAX, AS PROVIDED FOR
IN ARTICLE TWENTY OF THE TAX LAW.
  S 5. There is hereby appropriated to the division of state police  the
amount  of  six  million  dollars  ($6,000,000)  from  the cigarette tax
enforcement account to support  cigarette  tax  enforcement  activities.
This appropriation may be apportioned to either the patrol activities or
criminal  investigation  activities  program  of  the  division of state
police, may be transferred or suballocated to any other state agency  or
public  authority for their costs associated with the enforcement of the
cigarette tax, and may be used to contract with local enforcement  agen-
cies for cigarette tax enforcement activities. No monies shall be avail-
able from this appropriation absent a certificate of allocation from the
director of the budget.
  S  6.  This act shall take effect September 1, 2014 and shall apply in
accordance with the applicable transitional provisions of sections  1106
and 1217 of the tax law.

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