Relates to the imposition of tax on cigars; provides that such tax shall be imposed upon tobacco products sold, shipped or delivered within this state.
Ayes (52): Adams, Addabbo, Avella, Bonacic, Breslin, Carlucci, DeFrancisco, Dilan, Farley, Flanagan, Fuschillo, Gallivan, Gianaris, Golden, Griffo, Grisanti, Hannon, Hassell-Thomps, Johnson, Kennedy, Klein, Krueger, Lanza, Larkin, Libous, Little, Marcellino, Martins, McDonald, Montgomery, Nozzolio, O'Mara, Parker, Peralta, Ranzenhofer, Ritchie, Rivera, Robach, Saland, Sampson, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousin, Storobin, Valesky, Young, Zeldin
Nays (6): Ball, Diaz, Duane, LaValle, Maziarz, Perkins
Absent (1): Oppenheimer
Excused (3): Alesi, Espaillat, Huntley
BILL NUMBER:S7022 REVISED 05/01/12
TITLE OF BILL: An act to amend the tax law, in relation to the tax on certain tobacco products
PURPOSE: This bill changes the timing of the imposition, reporting and payment of the tax on tobacco products to provide the state with a stream of revenue it can depend upon, allowing the state to continue collecting revenue, and establishing ourselves as more competitive to surrounding states on cigars and other tobacco products.
SUMMARY OF PROVISIONS: Section 1 of the bill amends the opening paragraph of subdivision 1 of Tax Law §471-b to change the tax on tobacco products from being imposed on the importation and possession of tobacco products in the state for sale to being imposed on tobacco products sold, shipped or delivered within the state.
Section 2 of the bill amends subdivision 1 of Tax Law § 473-a to change the distributors' reporting requirements to conform to the amendment made by section 1 of this bill.
EXISTING LAW: Section 471-b and 473-a of the tax law.
JUSTIFICATION: New York companies that manufacture, distribute and sell cigars are an important part of the State's economy, providing well-paying jobs, and paying significant amounts in taxes to the State and local governments. Changing the timing of the imposition, reporting and payment of the tax on tobacco products will help small business owners across the state remain in business in New York State. By simply changing the timing this will enable small cigar shops across New York State to remain competitive with surrounding states. The bill will increase their revenue, enable them to carry more products and thus increase tax revenues on their products. This measure will save jobs in New York, have no negative budgetary ramifications and reduce the demand for purchases over the Internet.
Currently, some New York consumers are avoiding the high tax by purchasing the cigars over the Internet, or from non-taxed sources such as Native American smoke shops. Some consumers can also go to neighboring states with lower tax rates including Pennsylvania (which does not tax cigars), Connecticut (which levies a 50% tax or a 50 cent cap), New Jersey or Massachusetts (both which levy a 30% tax).
The net impact of this bill is an increase in tax revenue.
EFFECTIVE DATE: This act will take effect on the first day of the month next commencing at least ninety days after his act shall have become a law.
STATE OF NEW YORK ________________________________________________________________________ 7022 IN SENATE April 23, 2012 ___________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 the tax on certain tobacco products THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The opening paragraph of subdivision 1 of section 471-b of the tax law, as amended by section 2 of part QQ1 of chapter 57 of the laws of 2008, is amended to read as follows: There is hereby imposed and shall be paid a tax on all tobacco products
[possessed in this state by any person for sale]SOLD, SHIPPED OR DELIVERED WITHIN THIS STATE BY ANY PERSON, except that no tax shall be imposed on tobacco products sold under such circumstances that this state is without power to impose such tax, 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. S 2. Subdivision 1 of section 473-a of the tax law, as added by chap- ter 61 of the laws of 1989, is amended to read as follows: 1. Every distributor shall, on or before the twentieth day of each month, file with the commissioner of taxation and finance a return on forms to be prescribed and furnished by the commissioner, showing the quantity and wholesale price of all tobacco products [imported or caused to be imported into the state by him or manufactured in the state by him], SOLD, SHIPPED OR DELIVERED WITHIN THIS STATE BY SUCH DISTRIBUTOR during the preceding calendar month. Every distributor authorized by the commissioner to make returns and pay the tax on tobacco products sold, shipped or delivered by [him]SUCH DISTRIBUTOR to any person in the state shall file a return showing the quantity and wholesale price of all tobacco products so sold, shipped or delivered during the preceding calendar month. Provided, however, the commissioner may, if he OR SHEEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD15476-01-2 S. 7022 2
deems it necessary in order to insure the payment of the taxes imposed by this article, require returns to be made at such times and covering such periods as he OR SHE may deem necessary, and, by regulation, may permit the filing of returns on a quarterly, semi-annual or annual basis, or may waive the filing of returns by a distributor for such time and upon such terms as he OR SHE may deem proper if satisfied that no tax imposed by this article is or will be payable by
[him]SUCH DISTRIB- UTOR during the time for which returns are waived. Such returns shall contain such further information as the commissioner may require. S 3. The commissioner of taxation and finance shall establish proce- dures to provide for a credit against taxes paid by distributors for periods prior to the effective date of this act to offset the taxes due on or after the effective date of this act. S 4. This act shall take effect on the first day of the month next commencing at least ninety days after this act shall have become a law; provided that the commissioner of taxation and finance shall be author- ized on and after the date this act shall have become a law to adopt and amend any rules and regulations and issue any procedure, forms or instructions necessary to implement the provisions of this act on its effective date.