This bill has been amended

Bill S2008-2011

Relates to taxes on cigarettes sold on an Indian reservation to non-members of the Indian nation or tribe

Relates to taxes on cigarettes sold on an Indian reservation to non-members of the Indian nation or tribe; reverts the tax back to the previous $2.75 if taxes on such cigarettes are not collected by 9/1/2012 and then changes the tax to $4.35 once the state begins collecting such taxes.

Details

Actions

  • Jan 4, 2012: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • Jan 14, 2011: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Memo

BILL NUMBER:S2008

TITLE OF BILL: An act to amend the tax law, in relation to taxes on cigarettes sold on an Indian reservation to non-members of the Indian nation or tribe

PURPOSE: This bill temporarily suspends the $1.60 cigarette tax increase until the state begins collecting taxes on cigarettes sold on an Indian Reservation to non-members of the Indian Nation or Tribe.

SUMMARY OF PROVISIONS: Amends section 471 of the Tax Law by adding language to temporarily suspend the $1.60 cigarette tax increase until the state begins collecting taxes on cigarettes sold on an Indian Reservation to non-members of the Indian Nation or Tribe. If the state fails to collect the tax, this bill would impose the cigarette tax at $2.75; once the state begins collecting, the cigarette tax rate would be imposed at $4.35.

JUSTIFICATION: Chapter 134 of the Laws of 2010 (Emergency Spending Bill), raised various taxes, including a $1.60 cigarette tax increase beginning July 1, 2010, and set a firm deadline of September 1, 2010 to begin collecting taxes on cigarettes sold on an Indian Reservation to non-members of the Indian Nation or Tribe. On July 1st, the cigarette tax increase went into effect. However, on the September 1st deadline to collect taxes on cigarettes sold on an Indian Reservation to non-members of the Indian Nation or Tribe, Indian nations filed suits in state and federal courts. The courts responded by temporarily halting the September 1st collection date. The current cigarette tax increase and the subsequent failure of the State to collect taxes has only widened the gap of inequality between retailers and Indian nation sellers. It is not fair to uphold one part of Chapter 134 of the Laws of 2010 and yet temporarily halt another part of the law. Consequently, this bill aims to uphold fairness by temporarily suspending the $1.60 cigarette tax increase until the State begins collecting taxes on cigarettes sold on an Indian Reservation to non-members of the Indian Nation or tribe.

LEGISLATIVE HISTORY: 2010: S.8496 - Rules Committee; A.11720 - Ways and Means

FISCAL IMPLICATIONS: The fiscal impact is dependent upon the State collecting taxes on cigarettes sold on an Indian Reservation to non-members of the Indian Nation or tribe. The 2010-11 State fiscal year financial plan assumes the collection of $114 million in taxes from Indian reservation sales to non-Indians and $260 million in additional revenue from the increase in the excise tax of $1.60 per pack of 20 cigarettes.

EFFECTIVE DATE: Immediate.


Text

STATE OF NEW YORK ________________________________________________________________________ 2008 2011-2012 Regular Sessions IN SENATE January 14, 2011 ___________
Introduced by Sens. GRIFFO, LARKIN -- 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 taxes on cigarettes sold on an Indian reservation to non-members of the Indian nation or tribe THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision 1 of section 471 of the tax law, as amended by section 1 of part D of chapter 134 of the laws of 2010, is amended to read as follows: 1. There is hereby imposed and shall be paid a tax on all cigarettes possessed in the state by any person for sale, except that no tax shall be imposed on cigarettes sold under such circumstances that this state is without power to impose such tax, including sales to qualified Indi- ans for their own use and consumption on their nations' or tribes' qual- ified reservation, or sold to the United States or sold to or by a voluntary unincorporated organization of the armed forces of the United States operating a place for the sale of goods pursuant to regulations promulgated by the appropriate executive agency of the United States, to the extent provided in such regulations and policy statements of such an agency applicable to such sales. The tax imposed by this section is imposed on all cigarettes sold on an Indian reservation to non-members of the Indian nation or tribe and to non-Indians and evidence of such tax shall be by means of an affixed cigarette tax stamp. Indian nations or tribes may elect to participate in the Indian tax exemption coupon system established in section four hundred seventy-one-e of this article which provides a mechanism for the collection of the tax imposed by this section on cigarette sales on qualified reservations to such non-members and non-Indians and for the delivery of quantities of tax-exempt ciga- rettes to Indian nations or tribes for the personal use and consumption of qualified members of the Indian nation or tribe. If an Indian nation
or tribe does not elect to participate in the Indian tax exemption coupon system, the prior approval system shall be the mechanism for the delivery of quantities of tax-exempt cigarettes to Indian nations or tribes for the personal use and consumption of qualified members of the Indian nation or tribe as provided for in paragraph (b) of subdivision five of this section. Such tax on cigarettes shall be at the rate of four dollars and thirty-five cents for each twenty cigarettes or frac- tion thereof, provided, however, that if a package of cigarettes contains more than twenty cigarettes, the rate of tax on the cigarettes in such package in excess of twenty shall be one dollar and eight and three-quarters cents for each five cigarettes or fraction thereof. PROVIDED FURTHER THAT IF THE STATE FAILS TO COLLECT TAXES ON CIGARETTES SOLD ON AN INDIAN RESERVATION TO NON-MEMBERS OF THE INDIAN NATION OR TRIBE BY SEPTEMBER FIRST, TWO THOUSAND ELEVEN, THAT SUCH CIGARETTE TAX RATE WOULD REVERT TO THE RATE OF TWO DOLLARS AND SEVENTY-FIVE CENTS AS PREVIOUSLY STATED IN LAW BEFORE THE PASSAGE OF CHAPTER ONE HUNDRED THIR- TY-FOUR OF THE LAWS OF TWO THOUSAND TEN. ONCE THE STATE BEGINS COLLECT- ING TAXES ON CIGARETTES SOLD ON AN INDIAN RESERVATION TO NON-MEMBERS OF THE INDIAN NATION OR TRIBE, THE CIGARETTE TAX RATE WOULD BE IMPOSED AT FOUR DOLLARS AND THIRTY-FIVE CENTS AS SPECIFIED IN CHAPTER ONE HUNDRED THIRTY-FOUR OF THE LAWS OF TWO THOUSAND TEN. Such tax is intended to be imposed upon only one sale of the same package of cigarettes. It shall be presumed that all cigarettes within the state are subject to tax until the contrary is established, and the burden of proof that any cigarettes are not taxable hereunder shall be upon the person in possession thereof. S 2. This act shall take effect immediately.

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