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 2 - Cigarette Marketing Standards
Part 82 - Unlawful Acts
Section 82.4 - Unlawful acts of a chain store

(1) to induce or attempt to induce or to procure or attempt to procure the purchase of cigarettes at a price which is less than the cost of the agent with respect to sales to chain stores, if purchased from an agent, or at a price which is less than the cost of the CMSA wholesale dealer with respect to sales to chain stores (see sections 82.2 and 82.3 of this Part); or

(2) to induce or attempt to induce or to procure or attempt to procure any rebate or concession of any kind or nature whatsoever in connection with the purchase of cigarettes (see Part 84 of this Title for rebates and concessions).

(1) A chain store may not purchase cigarettes in New York State at a price which is less than the cost of the agent with respect to sales to chain stores, if purchased from an agent, or at a price which is less than the cost of the CMSA wholesale dealer with respect to sales to chain stores, if purchased from a CMSA wholesale dealer. A chain store which wishes to purchase cigarettes at a price which is less than the cost of the CMSA retail dealer, must furnish its supplier with a copy of its New York State certificate of registration as a chain store. Just as the supplier must have knowledge of its purchaser, so too must a chain store have knowledge of its supplier. A chain store must be capable of demonstrating to the satisfaction of the Department of Taxation and Finance that it purchased cigarettes at a price which was not less than the cost of the agent or the cost of the CMSA wholesale dealer, as the case may be, with respect to sales to chain stores. In doing so, the chain store may ultimately need to call upon its supplier to help establish such costs.

(2) A chain store, which has no reason to believe otherwise, may assume that it has not violated any provision of article 20-A of the Tax Law, where such chain store purchases standard brand cigarettes in this State at a price which is greater than or equal to the cost of the agent or cost of the CMSA wholesale dealer, with respect to sales to chain stores, as periodically published by the department in accordance with sections 82.2(b)(4) and 82.3(b)(4) of this Part.

(1) The following illustrations exemplify the provisions of this section with respect to purchases and sales of cigarettes by chain stores. Such illustrations are a continuance of sections 82.2(e)(2)(iii) and 82.3(f)(3)(ii) of this Part.

(2) Purchases by a chain store (illustrated). A chain store may not purchase cigarettes in New York State at a price which is less than the cost of the agent or the cost of the CMSA wholesale dealer, with respect to sales to chain stores. Using the cited examples in sections 82.2 and 82.3 of this Part, a chain store having 15 or more retail outlets, excluding vending machine operators, where such cigarettes are delivered to a central warehouse owned and operated by such chain store and which are then delivered by the chain store to its retail outlets may not purchase cigarettes from an agent for less than $86 a carton. Other chain stores may not purchase cigarettes from an agent or a CMSA wholesale dealer for less than $87.49 per carton.

(3) Sales by chain stores (illustrated). A chain store may not sell cigarettes in New York State at a price which is less than the cost of the CMSA retail dealer or, using the cited examples in sections 82.2 and 82.3 of this Part, $95.80 per carton. See section 82.5 of this Part.