2023 New York Laws › TAX - Tax › Article 20 - Tax on Cigarettes and Tobacco Products › 481 - Penalties and Interest.

§ 481. Penalties and interest. 1. (a)(i)(A) An agent or distributor or
other  person  treated as a distributor pursuant to section four hundred
seventy-one-d who or which fails to file a return  or  to  pay  any  tax
within the time required by or pursuant to this article (determined with
regard  to  any extension of time for filing or paying) shall be subject
to a penalty of ten per centum of the amount of tax determined to be due
as provided in this article plus one per centum of such amount for  each
month  or fraction thereof during which such failure continues after the
expiration of the first month after such return was required to be filed
or such  tax  became  due,  not  exceeding  thirty  per  centum  in  the
aggregate.
(B)  If  a tax on cigarettes or on tobacco products under this article
is not paid when due by any other person,  the  person  liable  for  the
payment of such tax shall be subject to a penalty of fifty per centum of
the  amount of such tax determined to be due as provided in this article
plus one per centum of such amount for each month  or  fraction  thereof
during  which  such failure to pay continues after the expiration of the
first month after such tax became due.
(C) In the case of a failure to file such return within sixty days  of
the  date  prescribed  for  filing of such return by or pursuant to this
article (determined with regard to any extension of  time  for  filing),
the  penalty imposed by this paragraph shall not be less than the lesser
of one hundred dollars or one hundred per centum of the amount  required
to  be  shown  as  tax  on such return. For the purpose of the preceding
sentence, the amount of tax required to be shown on the return shall  be
reduced  by the amount of any part of the tax which is paid on or before
the date prescribed for payment of the tax and  by  the  amount  of  any
credit against the tax which may be claimed upon the return.
(ii)  If  any  amount  of  tax  is not paid on or before the last date
prescribed in this article for payment, interest on such amount  at  the
underpayment  rate  set  by  the  commissioner  of  taxation and finance
pursuant to subdivision twenty-sixth of section one hundred  seventy-one
of  this chapter shall be paid for the period from such last date to the
date paid, whether or not any extension of time for payment was granted.
Interest under this subparagraph shall not be paid if the amount thereof
is less than one dollar.
(iii) If the tax commission determines that such failure or delay  was
due  to  reasonable cause and not due to willful neglect, it shall remit
all or part of such penalty. The tax commission shall  promulgate  rules
and regulations as to what constitutes reasonable cause.
(iv)  If  the  failure  to  pay any tax within the time required by or
pursuant to this article is due to fraud, in lieu of the  penalties  and
interest  provided  for in subparagraphs (i) and (ii) of this paragraph,
there shall be added to the tax (A) a penalty of two times the amount of
tax due, plus (B) interest on such unpaid tax at the  underpayment  rate
set  by the commissioner of taxation and finance pursuant to subdivision
twenty-sixth of section one hundred seventy-one of this chapter for  the
period  beginning  on  the  last  day prescribed by this article for the
payment of such tax (determined without regard to any extension of  time
for paying) and ending on the day on which such tax is paid.
(v) The penalties and interest provided for in this paragraph shall be
determined, assessed, collected and paid in the same manner as the taxes
imposed by this article and shall be disposed of as hereinafter provided
with  respect  to  moneys  derived  from  the  tax.  Interest under this
paragraph shall be compounded daily.
(b) (i) In addition to any other penalty imposed by this article,  the
commissioner  may  (A)  impose  a  penalty  of not more than six hundred
dollars for each two hundred cigarettes, or fraction thereof, in  excess

of  one  thousand cigarettes in unstamped or unlawfully stamped packages
in the possession or under the control of any person  or  (B)  impose  a
penalty  of  not  more  than  two hundred dollars for each ten unaffixed
false,   altered  or  counterfeit  cigarette  tax  stamps,  imprints  or
impressions, or fraction thereof, in the possession or under the control
of any person. In addition, the commissioner may impose a penalty of not
more than seventy-five dollars for each fifty cigars  or  one  pound  of
tobacco,  or  fraction thereof, in excess of two hundred fifty cigars or
five pounds of tobacco in the possession or under  the  control  of  any
person and a penalty of not more than one hundred fifty dollars for each
fifty cigars or pound of tobacco, or fraction thereof, in excess of five
hundred  cigars  or ten pounds of tobacco in the possession or under the
control of any person, with respect to which the  tobacco  products  tax
has  not  been  paid  or  assumed  by  a distributor or tobacco products
dealer; provided, however, that  any  such  penalty  imposed  shall  not
exceed  seven  thousand  five  hundred  dollars  in  the  aggregate. The
commissioner may impose a penalty of not more than seventy-five  dollars
for  each  fifty cigars or one pound of tobacco, or fraction thereof, in
excess of fifty cigars or one pound of  tobacco  in  the  possession  or
under  the  control  of  any  tobacco  products  dealer  or  distributor
appointed by the commissioner, and  a  penalty  of  not  more  than  one
hundred  fifty  dollars  for  each  fifty cigars or pound of tobacco, or
fraction thereof, in excess of two hundred fifty cigars or  five  pounds
of  tobacco in the possession or under the control of any such dealer or
distributor, with respect to which the tobacco products tax has not been
paid or assumed by a distributor or a tobacco products dealer; provided,
however, that any such penalty imposed shall not exceed fifteen thousand
dollars in the aggregate.
(ii) The penalties imposed by this subparagraph may be imposed by  the
commissioner  in  addition to any other penalty imposed by this article,
but in lieu of  the  penalties  imposed  by  subparagraph  (i)  of  this
paragraph:
(A)(I)(1)  not  less than thirty dollars but not more than two hundred
dollars for each two hundred cigarettes, or fraction thereof, in  excess
of  one  thousand  cigarettes  but  less  than or equal to five thousand
cigarettes in unstamped or unlawfully stamped packages knowingly in  the
possession  or knowingly under the control of any person or (2) not less
than thirty dollars but not more than two hundred dollars for  each  ten
unaffixed  false,  altered or counterfeit cigarette tax stamps, imprints
or impressions, or fraction thereof, less than or equal to  two  hundred
fifty  unaffixed  false,  altered  or  counterfeit cigarette tax stamps,
imprints or impressions, knowingly in the possession  or  knowing  under
the control of any person;
(II)(1)  not  less  than  seventy-five  dollars  but not more than two
hundred dollars for each two hundred cigarettes, or fraction thereof, in
excess of five thousand cigarettes but less  than  or  equal  to  twenty
thousand   cigarettes   in  unstamped  or  unlawfully  stamped  packages
knowingly in the possession or knowingly under the control of any person
or (2) not less than seventy-five dollars but not more than two  hundred
dollars  for  each ten unaffixed false, altered or counterfeit cigarette
tax stamps, imprints or impressions, or fraction thereof, in  excess  of
two  hundred fifty unaffixed false, altered or counterfeit cigarette tax
stamps, imprints or impressions but less than or equal to  one  thousand
unaffixed  false,  altered or counterfeit cigarette tax stamps, imprints
or impressions, knowingly in  the  possession  or  knowingly  under  the
control of any person; and
(III)(1)  not  less  than  one  hundred  dollars but not more than two
hundred dollars for each two hundred cigarettes, or fraction thereof, in

excess of twenty thousand cigarettes in unstamped or unlawfully  stamped
packages,  knowingly in the possession or knowingly under the control of
any person or (2) not less than one hundred dollars but  not  more  than
two hundred dollars for each ten unaffixed false, altered or counterfeit
cigarette  tax  stamps, imprints or impressions, or fraction thereof, in
excess of one thousand unaffixed false, altered or counterfeit cigarette
tax stamps, imprints or impressions,  knowingly  in  the  possession  or
knowingly under the control of any person.
(B)(I) not less than twenty-five dollars but not more than one hundred
dollars  for  each  fifty  cigars  or  one pound of tobacco, or fraction
thereof, in excess of two hundred fifty cigars or five pounds of tobacco
knowingly in the possession  or  knowingly  under  the  control  of  any
person, with respect to which the tobacco products tax has not been paid
or assumed by a distributor or tobacco products dealer; and
(II) not less than fifty dollars but not more than two hundred dollars
for  each  fifty  cigars  or  pound  of tobacco, or fraction thereof, in
excess of five hundred cigars or ten pounds of tobacco knowingly in  the
possession or knowingly under the control of any person, with respect to
which  the  tobacco  products  tax  has  not  been  paid or assumed by a
distributor or tobacco products dealer; provided, however, that any such
penalty imposed under this clause shall not exceed ten thousand  dollars
in the aggregate.
(C)(I) not less than twenty-five dollars but not more than one hundred
dollars  for  each  fifty  cigars  or  one pound of tobacco, or fraction
thereof, in excess of fifty cigars or one pound of tobacco knowingly  in
the  possession  or  knowingly  under  the  control  of any person, with
respect to which the tobacco products tax has not been paid  or  assumed
by a distributor or tobacco products dealer; and
(II) not less than fifty dollars but not more than two hundred dollars
for  each  fifty  cigars  or  pound  of tobacco, or fraction thereof, in
excess of two hundred fifty cigars or five pounds of  tobacco  knowingly
in  the  possession  or  knowingly under the control of any person, with
respect to which the tobacco products tax has not been paid  or  assumed
by  a  distributor or a tobacco products dealer; provided, however, that
any such penalty imposed under  this  clause  shall  not  exceed  twenty
thousand dollars in the aggregate.
(iii)  Any  penalty provided for in this paragraph shall be determined
as provided in section four hundred seventy-eight of this  chapter,  and
may  be  reviewed  only  pursuant to such section. Such penalty shall be
collected in the same manner as the taxes imposed by this  article.  The
commissioner  in the commissioner's discretion, may remit all or part of
such penalty. Such penalty shall be paid to the department and  disposed
of as hereinafter provided with respect to moneys derived from the tax.
(c) In addition to any other penalties that may be imposed by law, the
commissioner  may  impose  a  civil  penalty not to exceed five thousand
dollars against any tobacco product manufacturer or cigarette tax  agent
who  violates  the  provisions  of section four hundred eighty-b of this
article,  including  but  not  limited  to  the  filing   of   a   false
certification,   and   may  seek  to  suspend  or  cancel  any  license,
registration or  appointment  which  has  been  issued  to  such  person
pursuant to this chapter.
(d) In addition to any other penalties that may be imposed by law, the
commissioner  may  impose  a  civil  penalty not to exceed five thousand
dollars against any tobacco  product  manufacturer  or  distributor  who
violates  the  provisions  of  section  four  hundred  eighty-c  of this
article,  including  but  not  limited  to  the  filing   of   a   false
certification,   and   may  seek  to  suspend  or  cancel  any  license,

registration or appointment that has been issued to the tobacco  product
manufacturer or distributor under this chapter.
2.  (a)  The  possession  within  this state of more than four hundred
cigarettes in unstamped or unlawfully stamped packages or more than  two
hundred  fifty  cigars,  or  more than five pounds of tobacco other than
roll-your-own tobacco, or more than thirty-six ounces  of  roll-your-own
tobacco  by  any  person other than an agent or distributor, as the case
may be, at  any  one  time  shall  be  presumptive  evidence  that  such
cigarettes  or  tobacco  products are subject to tax as provided by this
article.
(b) Nothing in this section shall apply to common or contract carriers
or warehousemen  while  engaged  in  lawfully  transporting  or  storing
tobacco products or unstamped packages of cigarettes as merchandise, nor
to  any employee of such carrier or warehouseman acting within the scope
of  his  employment,  nor  to  public  officers  or  employees  in   the
performance  of their official duties requiring possession or control of
tobacco  products  or  unstamped  or  unlawfully  stamped  packages   of
cigarettes,  nor  to  temporary  incidental  possession  by employees or
agents of persons lawfully entitled to possession, nor to persons  whose
possession  is  for  the purpose of aiding police officers in performing
their duties.
3. For purposes of this chapter, the certificate of  the  commissioner
of  taxation and finance to the effect that a tax or fee imposed by this
article has not been paid, that  a  return  required  by  or  under  the
provisions  of  this article has not been filed, or that information has
not been supplied, as required  by  or  under  the  provisions  of  this
article, or that a bond or other security required by or pursuant to the
provisions  of this article has not been filed, or that books, accounts,
records, memoranda, documents  or  papers  have  not  been  supplied  as
required  by  or  pursuant  to  the authority of this article, or that a
retail dealer or vending machine owner or operator is not  currently  or
validly  registered  as  required  by  this article shall be prima facie
evidence that such tax or fee has not been paid, such return not  filed,
such  information  not  supplied, such bond or other security not filed,
that such books, accounts, records, memoranda, documents or papers  have
not  been  supplied, or that such retail dealer or vending machine owner
or operator is not currently or validly registered.
4. Cross-reference: For criminal penalties, see  article  thirty-seven
of this chapter.