NY Tax L § 480 (2021)
2021 New York Laws TAX - Tax Article 20 - Tax on Cigarettes and Tobacco Products 480 - License.

§  480.  License.  1.  General.  (a) On and after July first, nineteen hundred thirty-nine no person shall be a wholesale dealer unless he  has been  granted  and  publicly displays in his place of business a license from the department. Applications for licenses shall be  made  on  forms prescribed by the commissioner.  (b)  Applications  shall  be  accompanied  by proof of the applicant's financial responsibility, including, but not  limited  to,  satisfactory proof  of  a  minimum  net  worth of twenty-five thousand dollars if the applicant is an individual, or net worth in the  capitalization  of  the business  if  the  applicant  is not an individual equal to a minimum of twenty-five thousand dollars.  (c) Each applicant shall file with the department a bond issued  by  a surety  company  approved by the superintendent of financial services as to solvency and responsibility and authorized to  transact  business  in the state, in the face amount of ten thousand dollars, to secure payment of  any sums due for any violation of article twenty or article twenty-A of this chapter, or the regulations of the commissioner thereunder.  (d) Each applicant shall file satisfactory proof that it will maintain a secure separate warehousing facility for the purpose of receiving  and distributing cigarettes or tobacco products and conducting its wholesale business.  Such proof shall consist of a copy of a deed, or a copy of an executed lease for a minimum period of two years, to a separate,  secure warehouse.  If  the applicant carries on another business in conjunction with  the  warehouse  facility,  the  other  business  shall   also   be identified.  (e)  Each applicant shall file satisfactory proof that it will provide disability and workers' compensation insurance for its employees.  (f) Each applicant shall submit proof of United States citizenship  or eligibility  to  obtain  employment  within  the  United States if not a citizen. If the applicant is not an  individual,  such  proof  shall  be submitted with respect to each controlling person of the applicant.  (g)  The  fee  for the filing of an application for a license shall be fifteen hundred dollars, unless  such  fee  has  been  paid  during  the preceding  twelve months, in which case, the fee for a new license shall be one thousand dollars. Each application  shall  be  accompanied  by  a certified check for the required application fee.  (h)  Except as provided in subdivision four of this section, a license shall continue in  effect  until  revoked  or  suspended  for  cause  or surrendered.  (i)  A  license  shall  not  be  assignable  but  an  applicant who is purchasing the business of a licensee shall file a copy of the  contract of sale and any related documents with its application.  (j)  The commissioner may for cause refuse to issue, or may suspend or revoke a wholesaler's license, or may forbid a retail dealer to continue selling cigarettes or tobacco products or may forbid a  person  required to be appointed as a distributor of tobacco products who has not been so appointed   from  selling  cigarettes  or  tobacco  products,  after  an opportunity for hearing has been afforded. A violation of any  provision of  this  article or of any regulation issued under it shall be cause to forbid a  retail  dealer  to  continue  selling  cigarettes  or  tobacco products.  (k)  No  agent  shall  sell  cigarettes  and no distributor shall sell tobacco products to an unlicensed wholesale dealer, or  to  a  wholesale dealer  whose  license  has  been  suspended  or revoked, or to a retail dealer who is not registered under section four hundred eighty-a of this article, or whose registration has been suspended  or  revoked,  and  no wholesale  dealer  shall sell cigarettes or tobacco products to a retail dealer who is not registered under section four hundred eighty-a of this  article, or whose registration has been suspended  or  revoked,  and  no retail  dealer  shall  sell  cigarettes  or tobacco products unless such dealer is  registered  under  section  four  hundred  eighty-a  of  this article.  (l) Paragraphs (b), (c) and (g) of this subdivision shall not apply to the filing of an application for a license as a wholesale dealer that is based solely upon the ownership, operation or maintenance of one or more cigarette  or  tobacco products vending machines in, at or upon premises owned or occupied by another person, or that is based  solely  upon  the sale  of  tobacco  products  for  resale, or that is based upon both the ownership, operation or maintenance of one or more cigarette or  tobacco products  vending  machines in, at or upon premises owned or occupied by another person and the sale of tobacco products for resale.   2. Refusal to license. The commissioner of taxation  and  finance  may refuse to license an applicant where such applicant files an application under  this section and in considering such application the commissioner ascertains that:  (a) Any tax imposed under this chapter or under any related statute as defined in section eighteen hundred of this  chapter  has  been  finally determined  to be due from such applicant or controlling person and such tax has not been paid in full,  (b) Such applicant or any controlling person has been convicted  of  a crime provided for in this chapter within the preceding five years,  (c)  Such  applicant  or  any  controlling  person was the controlling person in another wholesale dealer at the time that:  (i) Any tax imposed under this  chapter  or  any  related  statute  as defined  in  section  eighteen  hundred  of  this  chapter  was  finally determined to be due from such other wholesale dealer and such  tax  has not been paid in full,  (ii) Such other wholesale dealer was convicted of a crime provided for in this chapter within the preceding five years, or  (iii)  The  license  of  such  other wholesale dealer was cancelled or suspended pursuant to this section within the preceding five years,  (d) The license of such applicant  has  been  cancelled  or  suspended pursuant to this section within the preceding five years,  (e)  Any controlling person of such applicant has committed any of the acts specified in subdivision three of this section within the preceding five years, or  (f)  Such  applicant  or  any  controlling  person  has  been  finally determined  to  have  violated  any of the provisions of this article or article twenty-A of this chapter, or  any  rule  or  regulation  adopted pursuant to this article or article twenty-A of this chapter.   3. Cancellation or suspension of license.  (a)  Acts  of  licensee.  The  license  of any wholesale dealer may be cancelled or suspended by the tax commission upon:  (i) Its failure to file or maintain in full force and effect a bond or other security when required or when the amount thereof is increased,  (ii) Its failure to comply with any of the provisions of this  article or  article  twenty-A  of this chapter or any rule or regulation adopted pursuant to this article or article twenty-A  of  this  chapter  by  the department or the commissioner, provided, however, that any violation of section  four  hundred  seventy-three-b  of this article shall result in license cancellation,  (iii) Its knowingly aiding and abetting another  person  in  violating any  of  the  provisions  of  this  article  or article twenty-A of this chapter or any rule or regulation adopted pursuant to  this  article  or article  twenty-A of this chapter by the department or the commissioner,  provided,  however,  that  any  violation  of   section   four   hundred seventy-three-b of this article shall result in license cancellation.  (b) Acts of licensee or controlling person. A license may be cancelled or  suspended  if  the  tax commission determines that a licensee or any controlling person:  (i) Commits fraud or deceit in his or its operations  as  a  wholesale dealer or has committed fraud or deceit in procuring his or its license,  (ii)  Has  been convicted in a court of competent jurisdiction, either within or without the state, of a  felony,  bearing  on  the  licensee's duties and obligations under this chapter,  (iii) Has impersonated any person represented to be a wholesale dealer under this article but not in fact licensed under this section, or  (iv) Has knowingly aided and abetted the sale of cigarettes or tobacco products by a person which such licensee or controlling person knows (A) has  not  been  licensed by the commissioner of taxation and finance and (B) is a wholesale dealer pursuant to the terms of subdivision eight  of section four hundred seventy of this chapter.   4.  If the commissioner of taxation and finance considers it necessary for the proper administration of the cigarette tax or  tobacco  products tax  imposed  by  this  article  or  the  cigarette  marketing standards contained in article twenty-A of  this  chapter  he  may  require  every person  under this article who holds a license to file a new application for a license in such form and at such  time  as  the  commissioner  may prescribe  and  to  surrender such license. The commissioner may require such filing and such surrender not more  often  than  once  every  three years.  Upon  the filing of such application with the proper fee and the surrender of such license, the commissioner  shall  issue,  within  such time as he may prescribe, a new license to each applicant.   5.  Hearing  procedure. (a) General. A notice of proposed cancellation or suspension of a license or refusal to issue a license shall be  given to  the  wholesale  dealer  licensed  pursuant  to this article or to an applicant applying for such license  in  the  manner  prescribed  for  a notice  of  deficiency  of  tax  and  all the provisions applicable to a notice  of  deficiency  under  article  twenty-seven  of  this  chapter, including,  but  not  limited  to,  those provisions authorizing the tax commission to abate on its own motion, shall apply to  a  notice  issued pursuant  to  this  subdivision,  insofar as such provisions can be made applicable to  a  notice  authorized  by  this  subdivision,  with  such modifications as may be necessary in order to adapt the language of such provisions  to the notice authorized by this subdivision. Such notice of proposed cancellation or suspension or of proposed  refusal  to  license must  be given to such person within five years from the date of the act or omission referred to in subdivision two or  three  of  this  section, except  that in the case of acts involving falsity or fraud, such notice may be issued at any time. All of such notices shall contain a statement advising the  person  to  whom  it  is  issued  that  the  cancellation, suspension  or  refusal  to  license may be challenged through a hearing process and that the petition for such challenge must be filed with  the tax commission within ninety days after the giving of such notice. Where a license is cancelled or suspended prior to a hearing, the cancellation or suspension may be challenged through the hearing process provided the petition for such challenge is filed within ninety days after the giving of notice of such cancellation or suspension.  (b)  Refusal  to  license.  In  the  case  of  a person applying to be licensed as a wholesale dealer, a notice of proposed refusal to  license shall  be  issued  promptly after application for license is received by the tax commission. Upon timely application therefor, a hearing shall be scheduled, and within three months from  such  application  for  hearing  (determined with regard to any postponements of any scheduled hearing or conference  or other delay made at the request of the applicant) the tax commission shall issue a notice of refusal to license or  shall  license the  applicant. If the tax commission fails to issue a notice of refusal to license within such three month period (or such  period  as  extended pursuant  to  this  paragraph),  the  tax  commission  shall license the applicant immediately upon the conclusion of such period so long as  the applicant  has  filed  a  bond  or other security as required by the tax commission.   6. For purposes of this section, the term "controlling  person"  means any person who is:  (a)  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  wholesale dealer's license or of a licensee under this article, or  (b) A shareholder, directly or indirectly owning more than ten percent of  the  number  of shares of stock of such applicant or licensee (where such applicant or  licensee  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 or another person entitling the holder thereof to vote for the election of directors or trustees,  in  the  case  of  an  applicant  or another person which 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 references to  ownership,  directly or indirectly, of voting stock.