2023 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.