New York Codes, Rules and Regulations
Title 20 - DEPARTMENT OF TAXATION AND FINANCE
Chapter I - Franchise and Certain Business Taxes
Subchapter I - Cigarette Tax, Cigarette Marketing Standards And Tobacco Products Tax
Article 1 - Cigarette Tax
Part 71 - Agent's License
Section 71.2 - Agent's credit bond requirement
Universal Citation: 20 NY Comp Codes Rules and Regs ยง 71.2
Current through Register Vol. 46, No. 12, March 20, 2024
Tax Law, § 472(1)
(a) Every cigarette agent, and every applicant for a license as a cigarette agent, who desires to establish credit for the purpose of purchasing cigarette stamps on credit is required to:
(1) file and maintain with the department a
credit bond executed by a surety company which is:
(i) authorized to transact business in this
State;
(ii) registered with and
under the supervision of the Insurance Department of New York State;
and
(iii) approved by the
Superintendent of Insurance as to solvency and responsibility; or
(2) deposit and maintain with the
department such other acceptable security enumerated in section
71.3 of
this Part. Such bond or security must be in such amount as the department may
require to secure the payment of any sum due from the agent pursuant to article
20 of the Tax Law.
(b) Credit bonds.
(1) The Department
of Taxation and Finance may, in its discretion, permit a licensed cigarette
agent to purchase stamps and to pay for such stamps within 30 days after the
date of purchase, provided the agent has filed a credit bond (or has deposited
other acceptable security) with the department in the required amount
conditioned upon such payment. An applicant for a license as a cigarette agent
or a licensed agent who wishes to purchase stamps on credit must apply to the
department for permission to do so. The department will evaluate such request
in the same manner as it evaluates applications for licenses as cigarette
agents. Where the department ascertains that the authorization to purchase
cigarette stamps on a 30-day credit basis will not jeopardize the payment of
any sums due the State from the agent pursuant to article 20 of the Tax Law, it
will fix the amount of the credit bond to be filed.
(2) In determining the amount of a credit
bond, the department will consider the amount of credit requested by the
applicant or agent and, in all cases, the amount of such bond shall be at least
equal to the amount of the New York State tax represented by the cigarette
stamps to be purchased on credit without regard to any commissions due the
agent with respect to such stamps. Additionally, the department may require the
credit bond to be in an amount which is sufficient to secure the payment of any
penalties, interest or other sums which may become due from the agent pursuant
to article 20. No credit for the purchase of cigarette stamps shall be granted
in excess of the amount secured for such purpose by a credit bond. A licensed
cigarette agent may apply to the department for an increase in the amount of
such credit subject to the same conditions as the original request for
authority to purchase stamps on a 30-day credit basis.
(3) The credit bond described herein is
required to secure the payment of any sums due the State pursuant to article 20
of the Tax Law. Agents who desire to purchase joint State and New York City
cigarette tax stamps on a 30-day credit basis must also file or deposit the
appropriate bond or security with the City of New York to secure the payment of
any sums due the city (see Chapter 13 of Title 11 of the New York City
Administrative Code).
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