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 76 - Exemptions From Tax
Section 76.1 - General

(1) The tax imposed on cigarettes possessed in the State for sale pursuant to section 471 of the Tax Law is not required to be paid on cigarettes sold under any circumstances that the State is without power to impose the tax. Further, such tax is not required to be paid on cigarettes sold to or by the United States or a voluntary unincorporated organization of the armed forces of the United States which operates a place for the sale of goods pursuant to regulations promulgated by the appropriate executive agency of the United States. The tax on cigarettes possessed for sale is not required to be paid on cigarettes sold to the State of New York, to out-of-state purchasers or to the United Nations.

(2) The tax imposed on cigarettes used in the State pursuant to section 471-a of the Tax Law is not required to be paid on any cigarettes which are the subject of a tax exempt sale, provided such cigarettes are used within the scope of such exemption.

(3) The terms exempt, exemption from tax or similar phraseology as used in this Part and throughout this Title shall not be narrowly construed and shall include any privilege, right, exclusion, relief, immunity or other freedom from the cigarette tax allowed by or pursuant to the authority of law.

(1) In general, exemptions from the cigarette tax shall be effectuated by means of a licensed cigarette agent's sale of cigarettes upon which such tax has not been prepaid by the seller on behalf of the ultimate consumer nor precollected as part of the selling price of such cigarettes. Cigarettes upon which the tax has not been prepaid and precollected shall include unstamped packages of cigarettes, as well as specially stamped exempt packages if so authorized by the Commissioner of Taxation and Finance. Cigarettes upon which the tax has been paid shall, only in extraordinary circumstances or as specifically provided for in Part 77 of this Title, be sold for exempt purposes. Where the seller of such cigarettes or an exempt purchaser can establish to the satisfaction of the Department of Taxation and Finance that circumstances necessitated the sale or purchase of cigarettes upon which the tax had been paid and that such tax was borne by the seller or exempt purchaser, as the case may be, the department may refund the tax paid. No interest shall be paid by the department on any such refunds.

(2) Except as provided herein, only a licensed cigarette agent may sell cigarettes upon which the tax has not been prepaid and precollected. Exceptions to this rule are limited to sales by:

(1) It is presumed that all cigarettes within the State are subject to tax until the contrary is established. The burden of proof that any cigarettes are not taxable is upon the person or persons in possession of such cigarettes. To satisfy this burden of proof, any person purchasing cigarettes who is entitled to an exemption from tax, or any person who is entitled to purchase for resale to exempt purchasers cigarettes upon which the seller has not prepaid and precollected the cigarette tax, must furnish to the seller of such cigarettes (or have furnished to the seller on its behalf) proper documentation substantiating its right to such entitlement. Upon presentation of the proper documentation, the seller may supply such purchasers with cigarettes upon which the tax has not been prepaid and precollected.

(2) In order to make purchases of cigarettes upon which the seller has not prepaid and precollected the cigarette tax, a purchaser must furnish to the seller:

(3) Every person selling cigarettes upon which the cigarette tax has not been prepaid and precollected must obtain from the purchaser and retain as part of such person's records such certificates, documents or other proof of exemption in support of all exempt sales. Documentation substantiating an exempt transaction must be retained by the seller for at least three years following the date that the transaction was required to be reported to the department or the date that the transaction was actually reported to the department, if later. Where such transaction is not required to be reported to the department, such documentation must be retained by the seller for at least three years following the date of the transaction.

(1) A seller of cigarettes who, at or prior to the delivery of such cigarettes, in good faith accepts from the purchaser a properly completed exemption certificate or other document evidencing an exemption from tax or a purchase for resale to exempt purchasers, is relieved of the liability for failure to have prepaid and precollected the cigarette tax with respect to that transaction and the burden of proving that such sale of cigarettes is not subject to tax is solely on the purchaser.

(2)