Authorizes the New York city commissioner of finance to approve suitable rewards for information that leads to the detection of violations of the tax on cigarettes.
TITLE OF BILL: An act to amend the administrative code of the city of New York, in relation to authorizing the payment of rewards in connection with the enforcement of the cigarette tax
PURPOSE: To curb cigarette tax evasion by allowing the New York City Department of Finance to provide suitable rewards to those providing information leading to violations of the tax on cigarettes.
SUMMARY OF PROVISIONS: Section 1 of the bill amends Section 11-1308 of the Administrative Code of the City of New York to add a new subdivision 12 authorizing the Commissioner of Finance to approve suitable rewards for information that leads to the detection of violations of the tax on cigarettes authorized by Chapter 13 of title 11 of the administrative code.
Such rewards are to be payable from amounts (exclusive of interest) collected by the Department of Finance in connection with enforcement of Chapter 13 and Sections 11-4007, 114008, 11-4009, 11-4012 and 11-4021 of title 11 by reason of the information provided. Section 1 further provides that, in general, a suitable reward will not exceed fifteen percent of amounts collected (other than interest) based on the information provided.
JUSTIFICATION: This bill enhances the New York City Department of Finance's ability to collect the City's cigarette tax. The unlawful sale of untaxed cigarettes has become a serious problem in New York City and across the state. The increase in the New York State and New York City cigarette taxes have led to increased efforts to avoid payment of the City cigarette tax on sales of cigarettes in New York City. Enabling the Department of Finance to reward individuals who provide information that leads to the detection of violations of the City's cigarette tax would be a valuable enforcement tool. Increased detection of City cigarette tax avoidance would also bolster New York State cigarette and sales tax collections.
LEGISLATIVE HISTORY: 2011-12- A.1803- Held for consideration in Ways and Means. 2009-10- A.2792 - Referred to Ways and Means/S.2322Advanced to 3rd Reading 2007-08- A.7323 - Referred to cities/S.739Passed Senate.
FISCAL IMPLICATIONS: To be determined
EFFECTIVE DATE: This act shall take effect immediately
STATE OF NEW YORK ________________________________________________________________________ 6349 IN SENATE January 17, 2014 ___________Introduced by Sen. LANZA -- read twice and ordered printed, and when printed to be committed to the Committee on Cities AN ACT to amend the administrative code of the city of New York, in relation to authorizing the payment of rewards in connection with the enforcement of the cigarette tax THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 11-1308 of the administrative code of the city of New York is amended by adding a new subdivision 12 to read as follows: 12. IN HIS OR HER SOLE DISCRETION, TO APPROVE A REWARD, IN A SUITABLE AMOUNT, FOR INFORMATION THAT LEADS TO (I) THE DETECTION OF UNDERPAYMENTS OF TAX OR FEES REQUIRED TO BE PAID UNDER THIS CHAPTER, (II) THE DETECTION OF, AND ASSESSMENT OF PENALTIES ON, PERSONS VIOLATING OR CONSPIRING TO VIOLATE ANY PROVISION OF THIS CHAPTER, (III) THE DETECTION AND CONVICTION UNDER CHAPTER FORTY OF THIS TITLE OF PERSONS GUILTY OF VIOLATING OR CONSPIRING TO VIOLATE ANY PROVISIONS OF THIS CHAPTER, (IV) A SEIZURE AND FORFEITURE OF CIGARETTES UNDER SECTION 11-4021 OF THIS TITLE, OR (V) A SUSPENSION OR REVOCATION OF A LICENSE ISSUED UNDER THIS CHAPTER. THE REWARDS PROVIDED FOR BY THIS SUBDIVISION WILL BE PAID FROM THE PROCEEDS OF AMOUNTS (OTHER THAN INTEREST) COLLECTED IN CONNECTION WITH THE ADMINISTRATION OF THIS CHAPTER AND SECTIONS 11-4007, 11-4008, 11-4009, 11-4012 AND 11-4021 OF THIS TITLE BY REASON OF THE INFORMATION PROVIDED. FOR PURPOSES OF THIS SUBDIVISION, PROCEEDS OF AMOUNTS (OTHER THAN INTEREST) COLLECTED IN CONNECTION WITH THE ADMINISTRATION OF THIS CHAPTER AND SECTIONS 11-4007, 11-4008, 11-4009, 11-4012 AND 11-4021 OF THIS TITLE BECAUSE OF THE INFORMATION PROVIDED INCLUDE BOTH ADDITIONAL AMOUNTS COLLECTED AND AMOUNTS COLLECTED PRIOR TO RECEIPT OF THE INFORMA- TION IF THE INFORMATION LEADS TO THE DENIAL OF A CLAIM FOR REFUND THAT OTHERWISE WOULD HAVE BEEN PAID. A "SUITABLE AMOUNT" FOR PURPOSES OF THIS SUBDIVISION WILL DEPEND ON THE FACTS AND CIRCUMSTANCES, BUT GENERALLY WILL NOT EXCEED FIFTEEN PERCENT OF THE AMOUNT (OTHER THAN INTEREST) COLLECTED BY REASON OF THE INFORMATION PROVIDED. S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01170-01-3