(a) When using these regulations the following words shall have the meanings here indicated:
Agent. An "agent" shall mean any person authorized to purchase and affix adhesive or meter stamps under the law who is designated as an agent by the Commissioner of Finance.
Cigarette. A "cigarette" shall mean any roll for smoking made wholly or in part of tobacco or any other substance irrespective of size or shape and whether or not such tobacco or substance is flavored, adulterated or mixed with any other ingredient, the wrapper or cover of which is made of paper or any other substance or material except tobacco.
City. "City" shall mean the city of New York.
Commissioner of Finance. The "Commissioner of Finance" shall mean the Commissioner of Finance of the City.
Controlling person. A "controlling person" shall mean any person who is:
(1) an officer, director or partner or, in the case of a limited liability company, a member or a person having with respect to such limited liability company authority analogous to that of an officer or director with respect to a corporation, of an applicant for a license, or
(2) a shareholder, directly or indirectly owning more than ten percent of the number of shares of stock of such applicant (where such applicant is a corporation) entitling the holder thereof to vote for the election of directors or trustees. For purposes of this paragraph, where reference is made to ownership, directly or indirectly, of more than ten percent of the shares of stock of the applicant entitling the holder thereof to vote for election of directors or trustees, in the case of an applicant that at the relevant time has four or fewer shareholders holding shares entitling the holders thereof to vote for the election of directors or trustees, twenty-five percent or more shall be substituted as the applicable percentage in such reference to ownership, directly or indirectly, of voting stock.
Dealer. A "dealer" shall mean any wholesale dealer or retail dealer as hereinafter defined.
Package. "Package" shall mean the individual package, box or other container in or from which retail sales of cigarettes are normally made or intended to be made.
Person. A "person" shall mean any individual, partnership, society, association, joint stock company, corporation, estate, receiver, trustee, assignee, referee or any other person acting in a fiduciary or representative capacity, whether appointed by a court or otherwise, and any combination of individuals.
Retail dealer. A "retail dealer" shall mean any person other than a wholesale dealer engaged in selling cigarettes. For the purposes of the law, the possession or transportation at any one time of 5,000 or more cigarettes by any person other than a manufacturer, an agent, a licensed wholesale dealer or a person delivering cigarettes in the regular course of business for a manufacturer, an agent or a licensed wholesale or retail dealer, is presumptive evidence that such person is a retail dealer.
Sale or purchase. A "sale" or "purchase" shall mean any transfer of title or possession or both, exchange or barter, conditional or otherwise, in any manner or by any means whatsoever or any agreement therefor. In addition to cash and credit sales, the giving of cigarettes as samples, prizes or gifts, and the exchanging of cigarettes are, for the purpose of the tax, considered sales.
Use. "Use" shall mean any exercise of a right or power, actual or constructive, and shall include but is not limited to the receipt, storage, or any keeping or retention for any length of time, but shall not include possession for sale by a dealer.
Wholesale dealer. "Wholesale dealer" shall mean any person who sells cigarettes to retail dealers or other persons for purposes of resale only, and any person who owns, operates or maintains one or more cigarette vending machines in, at or upon premises owned or occupied by any other person.
(a) On or after January 1, 1976, and before July 2, 2002, a tax at the rate of four cents for each ten cigarettes or fraction thereof, must be paid upon all cigarettes possessed in the City for sale, provided, however, on or after August 6, 1985 and before July 2, 2002, if a package of cigarettes contain more than 20 cigarettes, the rate of tax on the cigarettes in such package in excess of 20 shall be two cents for each five cigarettes or fraction thereof. On or after July 2, 2002 a tax at the rate of 75 cents for each ten cigarettes or fraction thereof, must be paid upon all cigarettes possessed in the City for sale, provided, however if a package of cigarettes contain more than 20 cigarettes, the rate of tax on the cigarettes in such package in excess of 20 shall be 38 cents for each five cigarettes or fraction thereof. Every package of cigarettes must have affixed thereto stamps of the proper amount. For example: on or after July 2, 2002 a package containing from 11 to 20 cigarettes must have affixed $1.50 in stamps; a package containing ten cigarettes or less must have affixed 75 cents in stamps; a package containing 20 to 25 cigarettes must have affixed $1.88 in stamps; a package containing 26 to 30 cigarettes must have affixed $2.26 in stamps.
(b) Payment of cigarette tax on inventory.
(1) Local Law 10 of 2002 required every dealer of cigarettes, including agents licensed to purchase and affix stamps, to take a physical inventory of all cigarettes possessed in the City as of the close of business on July 1, 2002. In addition, such local law required every dealer who is a licensed agent to take a physical inventory of all unaffixed cigarette tax stamps possessed as of the close of business on such date. In the event that it was not possible to take a physical inventory of cigarettes in all vending machines that are located within the City, a dealer was permitted to take as many physical inventories of the contents of such machines as was possible with available personnel. For those machines that could not be physically inventoried on July 1, 2002, cigarettes could be accounted for at one-half the normal fill capacities of such machines, as reflected in the individual inventory records maintained for such machines.
(2) i) (A) On or before September 20, 2002, every such dealer shall file a return on a form prescribed by the Department of Finance for such purpose, showing the quantity of all cigarettes and unaffixed stamps possessed as of the July 1, 2002 inventory. Such return must reflect the entire wholesale and/or retail inventories of the dealer within the City, as required by the Department of Finance, regardless of the number of business locations of the dealer. Except as provided in subparagraph (B) of this subparagraph (i), every dealer shall pay, with the filing of such return, an additional tax for all cigarettes in such inventory that are contained in packages bearing stamps evidencing tax payment at the rates in effect prior to July 2, 2002, and for all unaffixed cigarette tax stamps in such inventory evidencing tax payment at such rates. The additional tax shall be paid at the rate of 71 cents for each ten cigarettes or fraction thereof ($1.42 per package of 20 cigarettes) unless cigarettes are contained in packages of more than 20, in which case the additional tax for those cigarettes in excess of 20 shall be at the rate of 36 cents for each five cigarettes or fraction thereof ($1.78 per package of 25 cigarettes). Such tax shall be paid regardless of whether the affixed or unaffixed stamps show payment of the New York State tax or both the New York State and City taxes.
(B) Notwithstanding any other provision of law to the contrary, the tax due on cigarettes possessed in the City, as of the close of business on July 1, 2002, by any person for sale solely attributable to the increase imposed by this local law, may be paid in two installments, due on the twentieth days of September 2002 and January 2003, subject to such terms and conditions as the Department of Finance may prescribe; provided, however, no less than 25 percent of each such tax due shall be paid by September 20, 2002. Provided, however, in no event shall such installment be less than $200 or the entire additional cigarette tax due, if less than $200. Thus a dealer having an additional cigarette tax liability on inventory of $100 would be liable for the full payment on September 20, 2002; a dealer having such a liability of $440 would be liable for a first installment of at least $200; and a dealer having such a liability of $10,000 would be liable for a first installment of at least $2,500 ($10,000 × 25%). The second and final installment must be paid to the Department of Finance on or before January 20, 2003, and must be accompanied by a final payment document prescribed by the Department of Finance for this purpose. Where the Department of Finance has cause to believe that the final installment of the additional cigarette tax on inventory may be jeopardized by delay, the Department of Finance may require such payment at any time prior to January 20, 2003. (See paragraph (3) of this subdivision for sanctions concerning untimely installments.)
(ii) The additional cigarette tax on inventory and any applicable installment should be paid by check or money order, payable to the New York City Department of Finance.
(3) i) Failure to file a return on cigarette and cigarette tax stamp inventory or to pay the additional tax due thereon, or failure to comply with any provision of this section may result in civil or criminal sanctions, or both.
(ii) In the case of any dealer who elects to pay the additional cigarette tax liability in installments, as described in subparagraph (B) of subparagraph (i) of paragraph (2) of this subdivision, if the required first installment is not properly paid on or before September 20, 2002, the entire amount of additional tax shall be due and owing, and any civil penalty and interest imposed pursuant to § 11-1317 of the Administrative Code and 19 RCNY § 4-23 will accrue from such date on the entire tax liability that remains unpaid. Where the required first installment is timely paid but any portion of the second and final installment is paid after January 20, 2003, any civil penalty and interest so imposed will accrue from such date on the unpaid balance.
This law provides that the tax shall not apply to:
(a) The use, otherwise than for sale, of four hundred cigarettes or less brought into the city, on or in possession of, any person;
(b) Cigarettes sold to the United States;
(c) Cigarettes 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;
(d) Cigarettes possessed in the city by an agent or wholesale dealer for sale to a dealer outside the city or for sale and shipment to any person in another state for use there, provided such agent or wholesale dealer complies with the regulations relating thereto;
(e) Cigarettes sold to the State of New York or any public corporation (including a public corporation created pursuant to agreement or compact with another state or the Dominion of Canada), improvement district or other political subdivision of the State where it is the purchaser, user or consumer and does not purchase said cigarettes for resale.
(a) Article 4. Except as otherwise provided herein, the tax shall be advanced by the agent or distributor. The agent shall be liable for the collection and payment of the tax to the Commissioner of Finance by purchasing from the Commissioner of Finance adhesive stamps of such design and denomination as may be prescribed by the Commissioner of Finance, subject to the approval of the State Tax Commission. The tax may also be paid by the use of such metering machines as are prescribed by the Commissioner of Finance subject to the approval of the State Tax Commission. In addition, every person liable for the tax on the use of cigarettes must file a return, in such form as the Commissioner of Finance may prescribe, with the Commissioner of Finance within twenty-four hours after liability therefor accrues together with a remittance of the tax shown to be due thereon.
(b) The amount of taxes advanced and paid by the agent or distributor as above provided shall be added to and collected as part of the sales price of the cigarettes.
(c) It is intended that the ultimate incidence of and liability for the tax shall be upon the consumer, and that any agent, distributor, or dealer who shall pay the tax to the Commissioner of Finance shall collect the tax from the purchaser or consumer.
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