Senate Passes Pro-Enforcement Tobacco Tax Bill

Increases the presumed “cost of the agent” for purposes of cigarette marketing; establishes the cigarette tax enforcement fund.

Senator Martin Golden makes his case:

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.

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.

Read more at NY State Senate…

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