S3410-2011 - NY Senate Open Legislation - Relates to the tax on certain tobacco products

Relates to implementing a sales tax cap of one dollar on cigars.

Sponsor: GOLDEN / Co-sponsor(s): LIBOUS, DEFRANCISCO, LARKIN, LITTLE, ZELDIN / Committee: INVESTIGATIONS AND GOVERNMENT OPERATIONS
Law Section: Tax Law / Law: Amd SS471-b & 471-c, Tax L

S3410-2011 Actions

Jan 4, 2012: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
Jan 4, 2012: returned to senate
Jan 4, 2012: died in assembly
Jun 21, 2011: referred to ways and means
Jun 21, 2011: DELIVERED TO ASSEMBLY
Jun 21, 2011: PASSED SENATE
Jun 13, 2011: ORDERED TO THIRD READING CAL.1188
Jun 13, 2011: REPORTED AND COMMITTED TO RULES
Jun 2, 2011: REPORTED AND COMMITTED TO FINANCE
Feb 18, 2011: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

S3410-2011 Meetings

Finance: Jun 15, 2011, Investigations and Government Operations: Jun 2, 2011, Rules: Jun 17, 2011

S3410-2011 Calendars

Active List: Jun 21, 2011 , Floor Calendar: Jun 14, 2011 , Floor Calendar: Jun 15, 2011 , Floor Calendar: Jun 16, 2011 , Floor Calendar: Jun 17, 2011 , Floor Calendar: Jun 21, 2011

S3410-2011 Votes

VOTE: COMMITTEE VOTE: - Investigations and Government Operations - Jun 2, 2011

Ayes (6): Marcellino, Alesi, Golden, Nozzolio, Zeldin, Diaz
Ayes W/R (1): Peralta
Nays (1): Squadron

VOTE: COMMITTEE VOTE: - Rules - Jun 14, 2011

Ayes (17): Skelos, Alesi, Farley, Hannon, Johnson, Larkin, Libous, Marcellino, Maziarz, Nozzolio, Saland, Seward, Sampson, Breslin, Dilan, Montgomery, Smith
Ayes W/R (2): LaValle, Duane
Nays (5): Hassell-Thompson, Krueger, Parker, Perkins, Stewart-Cousins

VOTE: FLOOR VOTE: - Jun 21, 2011

Ayes (43): Adams, Addabbo, Alesi, Ball, Bonacic, Breslin, Carlucci, DeFrancisco, Dilan, Farley, Flanagan, Gallivan, Golden, Griffo, Grisanti, Hannon, Hassell-Thomps, Johnson, Klein, Kruger, Lanza, Larkin, LaValle, Libous, Little, Marcellino, Martins, Maziarz, McDonald, Nozzolio, O'Mara, Ranzenhofer, Ritchie, Robach, Saland, Sampson, Savino, Seward, Skelos, Smith, Valesky, Young, Zeldin
Nays (18): Avella, Diaz, Duane, Fuschillo, Gianaris, Huntley, Kennedy, Krueger, Montgomery, Oppenheimer, Parker, Peralta, Perkins, Rivera, Serrano, Squadron, Stavisky, Stewart-Cousin
Absent (1): Espaillat

S3410-2011 Memo

BILL NUMBER:S3410

TITLE OF BILL:
An act
to amend the tax law, in relation to the tax on certain tobacco products

PURPOSE:
This bill caps the state imposed tax on cigars at 75% of the
wholesale price or $1.00 per cigar, whichever is less.

To remain competitive, and to provide the state with a stream of
revenue it can depend upon, it is only logical to impose a reasonable
tax cap on cigars, allowing the state to continue collecting revenue
and establish ourselves as more competitive to surrounding states in
the cigar market.

SUMMARY OF PROVISIONS:
Amends sections 471-b and 471-c of the tax law
to cap the tax on cigars at 75% of the wholesale price or $1.00 per
cigar, whichever is less.

EXISTING LAW:
Existing law provides for a 75% of wholesale price tax
on cigars, with no maximum as to the dollar amount.

STATEMENT OF SUPPORT:
New York companies that manufacture, distribute
and sell cigars are an important part of the State's economy,
providing well-paying jobs, and paying significant amounts in taxes to
the State and local governments.

In June of 2010, the State increased the excise tax rate on cigars by
63%. This increase was on top of a 2009 increase. Together, these new
taxes have had a negative impact on businesses and workers in New
York State.

Currently, some New York consumers are avoiding the high tax by
purchasing the cigars over the Internet, or from non-taxed sources
such as Native American smoke shops. Some consumers can also go to
neighboring states with lower tax rates including Pennsylvania (which
does not tax cigars) , Connecticut (which levies a 27.5% tax), New
Jersey or Massachusetts (both which levy a 30% tax).

The current tax rate is 75% of the cigar's wholesale price. As such,
the tax on a 25-cent cigar is equal to just under 19 cents, while the
tax on a handmade cigar could be as high as $11.25 for just one cigar.

By capping the wholesale sale price on cigars at 75% or $1 dollar per
cigar, whichever is less, we can save jobs in New York and prevent
people from
crossing borders, using the Internet and purchasing from non-taxed
sources such as Native American smoke shops.

FISCAL IMPLICATIONS:
None.


EFFECTIVE DATE:
Immediately.

S3410-2011 Text

 S T A T E   O F   N E W   Y O R K
 
                                          3410
 2011-2012 Regular Sessions
 I N  SENATE
 February 18, 2011
 
 Introduced  by  Sens.  GOLDEN, LIBOUS -- read twice and ordered printed,
 and when printed to be committed to the  Committee  on  Investigations
 and Government Operations
 AN  ACT  to amend the tax law, in relation to the tax on certain tobacco
 products
 THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section 1.  Paragraph (a) of subdivision 1 of section 471-b of the tax
 law,  as  amended  by section 18 of part D of chapter 134 of the laws of
 2010, is amended to read as follows:

 (a) Such tax on tobacco products other than CIGARS, snuff  and  little
 cigars  shall  be  at  the rate of seventy-five percent of the wholesale
 price, and is intended to be imposed only once  upon  the  sale  of  any
 tobacco products other than snuff and little cigars.
 

S  2.  Subdivision  1  of  section  471-b of the tax law is amended by
 adding a new paragraph (d) to read as follows:

 (D) SUCH TAX ON CIGARS SHALL BE AT THE RATE OF SEVENTY-FIVE PERCENT OF
 THE WHOLESALE PRICE OR ONE DOLLAR PER CIGAR, WHICHEVER IS LESS.
 

S 3. Paragraph (i) of subdivision (a) of section 471-c of the tax law,
 as amended by section 20 of part D of chapter 134 of the laws  of  2010,
 is amended to read as follows:

 (i)  Such  tax on tobacco products other than CIGARS, snuff and little
 cigars shall be at the rate of seventy-five  percent  of  the  wholesale
 price.
 

S  4.  Subdivision  (a)  of section 471-c of the tax law is amended by
 adding a new paragraph (iv) to read as follows:

 (IV) SUCH TAX ON CIGARS SHALL BE AT THE RATE OF  SEVENTY-FIVE  PERCENT
 OF THE WHOLESALE PRICE OR ONE DOLLAR PER CIGAR, WHICHEVER IS LESS.
 

S 5. This act shall take effect immediately.
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD01544-02-1

S3410-2011: Relates to the tax on certain tobacco products