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 74 - Imposition Of Cigarette Taxes
Section 74.2 - Payment of tax on cigarettes possessed for sale; cigarette tax stamps
Universal Citation: 20 NY Comp Codes Rules and Regs ยง 74.2
Current through Register Vol. 46, No. 12, March 20, 2024
Tax Law, §§ 274, 471, 472, 475 and 476
(a) The tax on cigarettes possessed for sale in the State is paid by the purchase of stamps as hereinafter provided and the payment of the tax is evidenced by the affixation of such stamps to individual packages of cigarettes. In the case of cigarettes possessed for sale in the City of New York, both State and city taxes must be paid. This is done by purchasing and affixing joint stamps showing payment of both taxes.
(b)
(1) The
Department of Taxation and Finance is directed to, and periodically enters into
and executes, for and on behalf of the State, contracts necessary for the
manufacture of cigarette tax stamps. Stamps manufactured are in such forms,
denominations and quantities as the department deems necessary for the payment
of the tax or taxes on the possession of cigarettes for sale imposed and/or
administered pursuant to the authority of article 20 of the Tax Law. The
department may, from time to time and as often as it 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.
(2)
(i) The department will furnish State of New
York cigarette stamps in $4.35 and $5.4375 denominations or the equivalent
thereof. In addition, joint stamps of a distinctive color and design will be
furnished in $5.85 ($4.35 State tax plus $1.50 city tax per package of 20
cigarettes) and $7.3175 ($5.4375 State tax plus $1.88 city tax per package of
25 cigarettes) denominations, or the equivalent thereof, for use on packages of
cigarettes to be sold in the City of New York. Such stamps will be of an
adhesive and/or heat transfer nature. (Stamps will also reflect prepayment of
sales tax on cigarettes imposed under section
1103 of the Tax Law.)
(ii) Any manufacturer, dealer or agent who
intends to sell within the State packages of cigarettes containing more than 25
cigarettes, must notify the department, in writing, of such intention at least
120 days prior to the time that such packages will be sold. Notification shall
not be required if the department has already prescribed, prepared and
furnished cigarette stamps of such form, denomination and quantity as may be
necessary for the proper payment of the cigarette taxes on such
packages.
(3) Cigarette
stamps so manufactured will be delivered or caused to be delivered to a fiscal
agent or agent bank which is appointed or licensed by the Department of
Taxation and Finance for the purpose of making authorized sales of such stamps
to licensed cigarette agents. No person, other than a duly appointed or
licensed fiscal agent or agent bank, may sell or offer for sale any cigarette
tax stamps without the express written permission of the Commissioner of
Taxation and Finance. Such a fiscal agent or agent bank shall be charged with
the lawful sale and distribution of cigarette stamps, the expeditious
remittance of the cigarette tax revenue to the department and the performance
of any and all acts pursuant to a written agreement entered into with the State
with respect to such services.
(4)
The department may review the activities of a manufacturer of cigarette tax
stamps, or of a fiscal agent or agent bank for purposes of verification of the
amount of any revenue due the State pursuant to article 20 of the Tax Law
and/or compliance with contractual agreements.
(c)
(1)
Licensed cigarette agents, located within or without the State, may purchase
cigarette tax stamps on either a cash or credit basis. Purchases must be placed
directly with the fiscal agent or agent bank and must be effectuated in
accordance with the terms and conditions prescribed in the written agreement
entered into by the fiscal agent or agent bank with the State, which is in
effect at the time of such purchases.
(i) In
general, a licensed agent, upon establishing its authority to the fiscal agent
or agent bank, may purchase stamps by telephone or by mail. In an emergency, an
agent may purchase stamps in person (see subparagraph [iii] of this
paragraph).
(ii)
(a) Payment in consideration for such stamps
must be made in cash, by guaranteed draft, by depository transfer or direct
wire transfer of funds or by any other method acceptable to the fiscal agent or
agent bank and approved by the department.
(b) Additionally, a licensed cigarette agent
may, in the discretion of the department, be permitted to pay for such stamps
within 30 days after the date of purchase, provided a credit bond or other
acceptable security has been filed or deposited with the department pursuant to
Part 71 of this Title. A fiscal agent or agent bank shall be notified, in
writing, by the department of the extent of an agent's credit privileges. In no
event shall credit for the purchase of cigarette stamps be granted in excess of
the amount of credit sanctioned by the department for such purpose.
(iii) Generally, delivery of
cigarette tax stamps to a licensed agent will be made by the United States
Postal Service via a classification of mail which guarantees next business day
delivery. Where an emergency necessitates that cigarette tax stamps be made
immediately available to the agent, arrangements may be made to allow the agent
to otherwise receive such stamps.
(2) Agents selling cigarettes in New York
City who desire to purchase joint State and city stamps must file with the
fiscal agent or agent bank and the department, a copy of such agent's
certificate of authority to purchase and affix New York City cigarette tax
stamps.
(d) Notwithstanding any other provision of article 20 of the Tax Law or this Title, the Department of Taxation and Finance may provide for the collection of the cigarette tax without the use of tax stamps. For example, the department may, in its discretion, provide that the payment of the cigarette tax be made directly to the department in advance of the distribution of sample cigarettes in the State.
(e) See section 1814 of article 37 of the Tax Law for criminal provisions applicable to false, altered or counterfeit stamps.
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