This bill has been amended

Bill S1958-2013

Increases the presumed "cost of the agent" relating to cigarette marketing standards and establishes the cigarette tax enforcement account; appropriation

Increases the presumed "cost of the agent" for purposes of cigarette marketing; establishes the cigarette tax enforcement account; makes an appropriation from such account to support cigarette tax enforcement activities.

Details

Actions

  • Jun 21, 2013: AMENDED ON THIRD READING 1576
  • Jun 21, 2013: COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • Jun 18, 2013: PRINT NUMBER 1958C
  • Jun 18, 2013: AMEND (T) AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • Jun 5, 2013: PRINT NUMBER 1958B
  • Jun 5, 2013: AMEND (T) AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 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

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.


Text

STATE OF NEW YORK ________________________________________________________________________ 1958 2013-2014 Regular Sessions IN 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-
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.

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