Current through Register Vol. 46, No. 12, March 20, 2024
Tax Law, §§ 471-b, 472, 473-a, 475
(a) Effective July 2, 2002, by enactment of
chapter 85 of the Laws of 2002, section 471-b of article 20 of the Tax Law
increased the tax on tobacco products possessed in New York State by any person
for sale from 20 percent to 37 percent of the wholesale price of such products.
It is presumed that all tobacco products within this State are subject to tax
until the contrary is established, and the burden of proving that any tobacco
products are not taxable shall be upon the person in possession
thereof.
(b) Every dealer of
tobacco products (whether a wholesale dealer or a retail dealer), including
distributors, shall take a physical inventory of all tobacco products possessed
in this State as of the close of business on July 1, 2002. Because it may be
impossible to take a physical inventory of tobacco products in all vending
machines that are on location throughout the State, a dealer may take as many
physical inventories of the contents of such machines as is possible with
available personnel. For those machines that cannot be physically inventoried
on July 1, 2002, tobacco products may be accounted for at one-half of the
normal fill capacities of such machines, as reflected in the individual
inventory records maintained for such machines.
(c)
Returns and payments.
(1)
(i) On
or before September 20, 2002, every such dealer shall file a return with the
Department of Taxation and Finance, on a form prescribed by the department for
such purpose, showing the quantity and wholesale price of all such tobacco
products possessed as of the July 1, 2002, inventory. Such return must reflect
the entire wholesale and/or retail inventories of the dealer within the State,
as required by the department, regardless of the number of business locations
of the dealer. Except as provided in subparagraph (ii) of this paragraph, every
dealer shall pay with the filing of such return an additional tobacco products
tax at the rate of 17 percent of the wholesale price of each tobacco product in
such inventory upon which the tobacco products tax has been paid at the rate of
20 percent. (See paragraph [2] of this subdivision for information regarding
the retail dealer election pertaining to wholesale price.)
(ii) Notwithstanding any other provision of
this Title to the contrary, a dealer who has an additional tobacco products tax
liability on inventory may elect to pay such tax in two installments. The first
installment is due with the filing of the return on or before September 20,
2002 and shall not be less than 25 percent of the entire additional tobacco
products tax due. Provided, however, in no event shall such installment be less
than $200 or the entire additional tobacco products tax due, if less than $200.
Thus, a dealer having an additional tobacco products tax liability on inventory
of $100 would be liable for the full payment on September 20, 2002; a dealer
having such a liability of $440 would be liable for a first installment of at
least $200; and a dealer having such a liability of $1,000 would be liable for
a first installment of at least $250 ($1,000 × 25 percent). The second
and final installment must be paid to the department on or before January 20,
2003, and must be accompanied by a final payment document prescribed by the
department for this purpose. Where the department has cause to believe that the
final installment of the additional tobacco products tax on inventory may be
jeopardized by delay, the department may require such payment at any time prior
to January 20, 2003. (See subdivision [e] of this section for sanctions
concerning untimely installments.)
(2) Notwithstanding any other provision of
this Title and exclusively for purposes of the additional tobacco products tax
on inventory on hand at the close of business on July 1, 2002, a retail dealer
may, if the dealer so elects, compute such tax using 50 percent of the price at
which the dealer sells the tobacco products at retail in New York State
(determined without regard to any State or local sales taxes imposed by article
28 of the Tax Law or pursuant to the authority of article 29 of such law) as
the wholesale price.
(3) The
additional tobacco products tax on inventory and any applicable installment
should be paid by check or money order, payable to the NYS Tobacco Products
Tax.
(4) Returns for payment of the
additional tobacco products tax on inventory and final payment documents may be
obtained from the Department of Taxation and Finance, Taxpayer Contact Center,
W.A. Harriman Campus, Albany, NY 12227.
(d) On and after July 2, 2002, every
distributor appointed or required to be appointed by the Commissioner of
Taxation and Finance (see section 471-b.2 of the Tax Law) shall be liable for
the payment of the tax at the rate of 37 percent of the wholesale price on
tobacco products imported or caused to be imported into the State, manufactured
in the State or, if authorized by the commissioner, sold, shipped, or delivered
to any person in the State by such distributor. However, every dealer shall be
liable for such tax on all tobacco products in the dealer's possession upon
which the tax has not been paid or assumed by a distributor appointed or
required to be appointed by the Commissioner of Taxation and Finance as
evidenced by such a distributor's invoice or other proof of payment or
assumption of tax.
(e)
(1) Failure to file a return on tobacco
product inventory or to pay the additional tax due thereon, or failure to
comply with any provision of this section or article 20 of the Tax Law may
result in civil or criminal sanctions, or both.
(2) In the case of any dealer who elects to
pay the additional tobacco products tax liability in installments, as described
in subdivision (c) of this section, if the required first installment is not
properly paid on or before September 20, 2002, the entire amount of additional
tax shall be due and owing, and any civil penalty and interest imposed pursuant
to section
481 of the Tax Law will accrue from such
date on the entire tax liability that remains unpaid. Where the required first
installment is timely paid but any portion of the second and final installment
is paid after January 20, 2003, any civil penalty and interest so imposed will
accrue from such date on the unpaid balance.
