S1958-2013 Actions

• Feb 4, 2013: PRINT NUMBER 1958A
• Feb 4, 2013: AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
• Jan 9, 2013: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

S1958-2013 Memo

BILL NUMBER:S1958

TITLE OF BILL:
An act
to amend the tax law, in relation to increasing the presumed "cost of
the agent" relating to cigarette marketing standards

PURPOSE:
The purpose of this bill is to increase the presumed "cost to the
agent" for purposes of cigarette marketing.

SUMMARY OF PROVISIONS:

Section 1: Amends subparagraph (B) of paragraph 1 of subdivision (b)
of section 483 of the tax law, as amended by chapter 1 of the laws of
1999, to provide that the presumed cost of doing business by the
agent selling to a wholesale dealer shall increase from seven-eighths
of one percent of the basic cost of cigarettes plus two cents to
seven-eighths of one percent of the basic cost of cigarettes plus
fourteen cents for a standard pack of 20 cigarettes. For sales to
chain stores, the presumed cost of doing business shall increase from
one and one-half percent of the basic cost of cigarettes plus two
cents to one and one-half percent of the basic cost of cigarettes
plus fourteen cents for a standard pack of 20 cigarettes. For sales
to retail dealers, the presumed cost of doing business shall increase
from three and seven-eighths percent of the basic cost of cigarettes
plus two cents to three and seven-eighths percent of the basic cost
of cigarettes plus fourteen cents for a standard pack of 20 cigarettes.

Section 2: Effective date.

EXISTING LAW:
Amends subparagraph (B) of paragraph 1 of subdivision (b) of section
483 of the tax law.

JUSTIFICATION:
Increased cigarette and tobacco excise taxes and the burden of
pre-payment of cigarette sales taxes, which have increased eight-fold
since the inception in addition to a variety of other factors, have
caused the "presumed cost of doing business" of the tax agents to
require an adjustment of 12 cents to the 15 year old handling fee of
2 cents per pack of 20 cigarettes. This will enable the remaining tax
agents to remain in business and help secure tax collection.

Note: In each instance where a pack contains 20 cigarettes, the
increase is from two cents to fourteen cents. Where a pack contains
25 cigarettes, the handling fee is increased from two cents to
seventeen cents. Where a pack contains 10 cigarettes, the handling
fee is increased from one cent to seven cents.

LEGISLATIVE HISTORY:
S.4736A of 2011 - Passed Senate 06/12/12

FISCAL IMPLICATIONS:
The increase in handling fees will preserve the almost Two Billion
Dollars in revenue that the Cigarette Tax Agents collect for the
State of New York every year and will ensure viability of the excise
tax collection process which has been severely damaged by the
increased costs of doing business and the loss of volume due to sales
by illegal untaxed sources. By not increasing the handling fees, the
State of New York may risk losing even more of its Cigarette Tax
Agents and thereby further deteriorate the tax collection methodology
expressed in Article 483 of the Tax Code. A further deterioration of
the tax collection process will lead to less revenue collected and
more cartons sold through illegal untaxed Sources. Furthermore, this
slight increase of 12 cents per pack of 20 cigarettes will have no
effect on the amount of taxed cartons sold within the State of New
York.

LOCAL FISCAL IMPLICATIONS:

EFFECTIVE DATE:
This act shall take effect July 1, 2013; provided, however, that if
this act shall not have become a law on or before July 1, 2013, then
this act shall take effect immediately and shall be deemed to have
been in full force and effect on and after July 1, 2013.

S1958-2013 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                    1958

                         2013-2014 Regular Sessions

                              I N  SENATE

                                 (PREFILED)

                               January 9, 2013
                                 ___________

  Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
    printed to be committed to the Committee on Investigations and Govern-
    ment Operations

  AN ACT to amend the tax law, in  relation  to  increasing  the  presumed
    "cost of the agent" relating to cigarette marketing standards

    THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section 1. Subparagraph (B) of  paragraph  1  of  subdivision  (b)  of
  section 483 of the tax law, as amended by chapter 1 of the laws of 1999,
  is amended to read as follows:

    (B) In the absence of the filing with the commissioner of satisfactory
  proof  of  a lesser cost of doing business of the agent making the sale,
  the cost of doing business by the agent shall be presumed to  be  seven-
  eighths  of  one  percent  of  the basic cost of cigarettes for sales to
  wholesale dealers plus [one cent] SEVEN CENTS per package of  ten  ciga-
  rettes, [two] FOURTEEN cents per package of twenty cigarettes and in the
  case  of  a package containing more than twenty cigarettes, [two] SEVEN-
  TEEN cents and one-half of a cent for each five cigarettes in excess  of
  twenty  cigarettes,  one and one-half percent of the basic cost of ciga-
  rettes for sales to chain stores plus [one cent] SIX CENTS  per  package
  of  ten  cigarettes, [two] TWELVE cents per package of twenty cigarettes
  and in the case of a package containing  more  than  twenty  cigarettes,
  [two] SEVENTEEN cents and one-half of a cent for each five cigarettes in
  excess  of  twenty cigarettes and three and seven-eighths percent of the
  basic cost of cigarettes with respect to sales to  retail  dealers  plus
  [one  cent]  SIX CENTS per package of ten cigarettes, [two] TWELVE cents
  per package of twenty cigarettes and in the case of a package containing
  more than twenty cigarettes, [two] SEVENTEEN cents  and  one-half  of  a
  cent  for  each  five  cigarettes in excess of twenty cigarettes and the
  foregoing cents per pack shall be included in the "cost of  doing  busi-

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD02219-01-3

 S. 1958                             2

  ness  by  the  agent"  referred  to  in paragraphs two and three of this
  subdivision.
    S  2. This act shall take effect July 1, 2013; provided, however, that
  if this act shall not have become a law on or before July 1, 2013,  then
  this  act shall take effect immediately and shall be deemed to have been
  in full force and effect on and after July 1, 2013.