Bill Text: NY A05144 | 2019-2020 | General Assembly | Introduced


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

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2020-01-08 - referred to ways and means [A05144 Detail]

Download: New_York-2019-A05144-Introduced.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                          5144
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                    February 7, 2019
                                       ___________
        Introduced  by  M.  of  A.  CYMBROWITZ -- Multi-Sponsored by -- M. of A.
          WEPRIN -- read once and referred to the Committee on Ways and Means
        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:
     1    Section  1.  Subparagraph  (B)  of  paragraph  1 of subdivision (b) of
     2  section 483 of the tax law, as amended by chapter 1 of the laws of 1999,
     3  is amended to read as follows:
     4    (B) In the absence of the filing with the commissioner of satisfactory
     5  proof of a lesser cost of doing business of the agent making  the  sale,
     6  the  cost  of doing business by the agent shall be presumed to be seven-
     7  eighths of one percent of the basic cost  of  cigarettes  for  sales  to
     8  wholesale  dealers plus [one cent] nine cents per package of [ten] ciga-
     9  rettes, [two cents per package of twenty cigarettes and in the case of a
    10  package containing more than twenty cigarettes, two cents  and  one-half
    11  of  a  cent  for  each  five  cigarettes in excess of twenty cigarettes]
    12  regardless of the number of cigarettes contained in  such  package,  one
    13  and  one-half percent of the basic cost of cigarettes for sales to chain
    14  stores plus [one cent] nine cents per package of [ten] cigarettes,  [two
    15  cents  per  package  of  twenty  cigarettes and in the case of a package
    16  containing more than twenty cigarettes, two cents and one-half of a cent
    17  for each five cigarettes in excess of twenty cigarettes]  regardless  of
    18  the  number  of  cigarettes  contained  in  such  package, and three and
    19  seven-eighths percent of the basic cost of cigarettes  with  respect  to
    20  sales  to retail dealers plus [one cent] nine cents per package of [ten]
    21  cigarettes, [two cents per package of twenty cigarettes and in the  case
    22  of  a package containing more than twenty cigarettes, two cents and one-
    23  half of a cent for each five cigarettes in excess of twenty  cigarettes]
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09355-01-9

        A. 5144                             2
     1  regardless of the number of cigarettes in such package and the foregoing
     2  cents  per  pack shall be included in the "cost of doing business by the
     3  agent" referred to in paragraphs two and three of this subdivision.
     4    §  2. Subdivision 1 of section 472 of the tax law, as amended by chap-
     5  ter 629 of the laws of 1996 and as further amended  by  section  104  of
     6  part A of chapter 62 of the laws of 2011, is amended to read as follows:
     7    1.  The  commissioner  shall  prescribe, prepare and furnish stamps of
     8  such denominations and quantities as may be necessary for the payment of
     9  the tax on cigarettes imposed by this article plus the  payment  by  the
    10  agent  of  a concurrent expense allowance for the cigarette tax enforce-
    11  ment account established pursuant to section  ninety-seven-ssss  of  the
    12  state  finance  law  of  four  cents  per stamp which shall be deposited
    13  pursuant to subdivision (c) of section four hundred eighty-two  of  this
    14  article,  and  may  from time to time and as often as he deems advisable
    15  provide for the issuance and exclusive use of stamps of a new design and
    16  forbid the use of stamps of any other design, in the manner and with the
    17  effect provided in section two hundred seventy-four of this chapter. The
    18  commissioner shall make provisions for the sale of such stamps  at  such
    19  places and at such times as he may deem necessary and may license agents
    20  for  such  purpose.  The commissioner may license dealers in cigarettes,
    21  who maintain separate warehousing facilities for the purpose of  receiv-
    22  ing  and distributing cigarettes and conducting their business, who have
    23  received commitments from at least  two  cigarette  manufacturers  whose
    24  aggregate  market  share is at least forty percent of the New York state
    25  cigarette market, and importers, exporters and  manufacturers  of  ciga-
    26  rettes,  and  other persons within or without the state as agents to buy
    27  or affix stamps to be used in paying the  tax  herein  imposed,  but  an
    28  agent  shall  at  all  times have the right to appoint the person in his
    29  employ who is to affix the stamps to any cigarettes  under  the  agent's
    30  control.  The  fee  for  filing  such application for an agent's license
    31  shall be one thousand five hundred dollars, unless  such  fee  has  been
    32  paid  during  the  preceding twelve months, in which case, the fee for a
    33  new license shall be one thousand dollars.  All  of  the  provisions  of
    34  section  four hundred eighty of this article relating to wholesale deal-
    35  ers' licenses,  including  the  procedure  for  suspension,  revocation,
    36  refusal  to  license and for hearings, except for paragraphs (c) and (g)
    37  of subdivision one of such  section,  shall  be  applicable  to  agents'
    38  licenses  applied  for  or  granted pursuant to this section, as if such
    39  provisions had been set forth  in  full  in  this  subdivision  and  had
    40  expressly  referred  to  the applicant for, or the holder of, an agent's
    41  license. Whenever the commissioner shall sell and deliver  to  any  such
    42  agent  any  such  stamps,  such  agent  shall  be entitled to receive as
    43  compensation for his services and expenses as such agent in  selling  or
    44  affixing  such stamps, and to retain out of the moneys to be paid by him
    45  for such stamps, a commission on the par value thereof. The commissioner
    46  is hereby authorized to prescribe a schedule of commissions, not exceed-
    47  ing five per centum, allowable to such agent  for  buying  and  affixing
    48  such  stamps. Such schedule shall be uniform with respect to the differ-
    49  ent types of stamps used, and may be on a graduated scale  with  respect
    50  to  the  number  of  stamps  purchased.  The  commissioner  may,  in his
    51  discretion, permit an agent to pay for such stamps  within  thirty  days
    52  after  the  date of purchase and may require any such agent to file with
    53  the department [of taxation and finance]  a  bond  issued  by  a  surety
    54  company  approved  by  the  superintendent  of  financial services as to
    55  solvency and responsibility and authorized to transact business  in  the
    56  state  or  other security acceptable to the commissioner, in such amount

        A. 5144                             3
     1  as the commissioner may fix, to secure the payment of any sums due  from
     2  such  agent  pursuant  to  this  article. If securities are deposited as
     3  security under this subdivision, such securities shall be  kept  in  the
     4  custody  of  the  commissioner and may be sold by the commissioner if it
     5  becomes necessary so to do in order to recover any sums  due  from  such
     6  agent  pursuant  to  this  article,  but no such sale shall be had until
     7  after such agent shall have had opportunity to litigate the validity  of
     8  any  tax if it elects so to do. Upon any such sale, the surplus, if any,
     9  above the sums due under this article shall be returned to such agent.
    10    § 3. Section 482 of the tax law, as amended by section 2 of part T  of
    11  chapter 61 of the laws of 2011, is amended to read as follows:
    12    § 482. Deposit and disposition of revenue. (a) All taxes, fees, inter-
    13  est  and  penalties collected or received by the commissioner under this
    14  article and article twenty-A of this  chapter  shall  be  deposited  and
    15  disposed  of  pursuant to the provisions of section one hundred seventy-
    16  one-a of this chapter.  (b)  From  the  taxes,  interest  and  penalties
    17  collected  or  received  by the commissioner under sections four hundred
    18  seventy-one and four hundred seventy-one-a of this article, effective on
    19  and  after  March  first,  two  thousand,  forty-nine   and   fifty-five
    20  hundredths, and effective on and after February first, two thousand two,
    21  forty-three  and  seventy  hundredths;  and  effective  on and after May
    22  first, two thousand  two,  sixty-four  and  fifty-five  hundredths;  and
    23  effective  on  and  after April first, two thousand three, sixty-one and
    24  twenty-two hundredths percent; and effective on and  after  June  third,
    25  two  thousand  eight,  seventy  and  sixty-three hundredths percent; and
    26  effective on and after July first, two thousand ten, seventy-six percent
    27  collected or received under those sections  must  be  deposited  to  the
    28  credit  of  the  tobacco  control  and  insurance initiatives pool to be
    29  established and distributed by the commissioner of health in  accordance
    30  with section twenty-eight hundred seven-v of the public health law.  (c)
    31  From  the  amounts  received pursuant to subdivision one of section four
    32  hundred seventy-two of this article, the commissioner shall  deposit  in
    33  the  cigarette  tax  enforcement account established pursuant to section
    34  ninety-seven-ssss of the state finance law the concurrent expense allow-
    35  ance for the cigarette tax enforcement fund of four cents per stamp.
    36    § 4. The state finance law is amended by adding a new section  97-ssss
    37  to read as follows:
    38    §  97-ssss.  Cigarette  tax  enforcement  account.  1. There is hereby
    39  created in the joint custody of the state comptroller  and  the  commis-
    40  sioner  of  taxation and finance an account of the miscellaneous special
    41  revenue fund to be known as the "cigarette tax enforcement account".
    42    2. Notwithstanding any other law, rule or regulation to the  contrary,
    43  the  state  comptroller is hereby authorized and directed to receive for
    44  deposit to the credit of the cigarette tax  enforcement  account  monies
    45  received  from the commissioner of taxation and finance from the concur-
    46  rent expense allowance paid pursuant to subdivision one of section  four
    47  hundred seventy-two of the tax law, and other monies appropriated, cred-
    48  ited or transferred thereto from any other fund or source.
    49    3. The proceeds of the cigarette tax enforcement account shall be used
    50  solely  to  enforce the collection of the cigarette tax, as provided for
    51  in article twenty of the tax law.
    52    § 5. There is hereby appropriated to the division of state police  the
    53  amount  of  six  million  dollars  ($6,000,000)  from  the cigarette tax
    54  enforcement account to support  cigarette  tax  enforcement  activities.
    55  This appropriation may be apportioned to either the patrol activities or
    56  criminal  investigation  activities  program  of  the  division of state

        A. 5144                             4
     1  police, may be transferred or suballocated to any other state agency  or
     2  public  authority for their costs associated with the enforcement of the
     3  cigarette tax, and may be used to contract with local enforcement  agen-
     4  cies for cigarette tax enforcement activities. No monies shall be avail-
     5  able from this appropriation absent a certificate of allocation from the
     6  director of the budget.
     7    §  6. This act shall take effect September 1, 2019, and shall apply in
     8  accordance with the applicable transitional provisions of sections  1106
     9  and 1217 of the tax law.
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