This bill has been amended

Bill S1958A-2013

Increases the presumed "cost of the agent" for purposes of cigarette marketing

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

  • 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:S1958A

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: This bill increases the presumed "cost to the agent" for purposes of Cigarette Marketing Standards Act.

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: Currently, for a standard pack of twenty cigarettes, the cost of agent for sales from an agent to a wholesaler, chain store, or retailer is a percentage of the basic cost of cigarettes plus two cents.

JUSTIFICATION: The "presumed cost of doing business" for cigarette stamping agents, which was enacted to help defer the cost of acting as the State's agent for the collection of the cigarette excise tax, has not increased 1999. Since 1999, the cigarette excise tax has increased almost three hundred percent, which stamping agents are required to prepay. This prepayment burden, in addition to a variety of other factors, has caused the cost of doing business for cigarette stamping agents to well exceed the "presumed cost of doing business" provided by the Tax Law. To bring the "presumed cost of doing business" more in line with the actual cost of doing business, the "presumed cost of doing business" requires an adjustment.- The "presumed cost of doing business" will be adjusted from two cents to twelve cents per pack of twenty cigarettes, with corresponding adjustments for packages of ten and twentyfive cigarettes. This increase will enable the stamping agents to remain in business and help secure tax collection.

Note: In each instance where a pack contains twenty cigarettes, the increase is from two cents to fourteen cents. Where a pack contains

twenty-five cigarettes, the handling fee is increased from two cents to seventeen cents. Where a pack contains ten cigarettes, the handling fee is increased from one cent to seven cents.

LEGISLATIVE HISTORY: 2011-2: S.4763-A - Passed Senate both years

FISCAL IMPLICATIONS: By increasing the minimum price of cigarettes sold in New York, the State will collect increased sales tax revenues.

EFFECTIVE DATE: This act shall take effect on the first day of the sales tax quarterly period, as described in subdivision (b) of section 1136 of the tax law, next succeeding the 90th day after it shall have become law and shall apply in accordance with the applicable transitional provisions of sections 1106 and 1217 of the tax law.


Text

STATE OF NEW YORK ________________________________________________________________________ 1958--A 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 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee 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 on the first day of the sales tax quarterly period, as described in subdivision (b) of section 1136 of the tax law, next succeeding the ninetieth day after it shall have become a law and shall apply in accordance with the applicable transitional provisions of sections 1106 and 1217 of the tax law.

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