2023 New York Laws › TAX - Tax › Article 20 - Tax on Cigarettes and Tobacco Products › 471-E - Taxes Imposed on Qualified Reservations.

§  471-e.  Taxes  imposed  on  qualified  reservations.  1. Indian tax
exemption coupon system.  (a)  Notwithstanding  any  provision  of  this
article  to  the  contrary qualified Indians may purchase cigarettes for
such qualified Indians' own use or consumption exempt from cigarette tax
on their nations'  or  tribes'  qualified  reservations.  However,  such
qualified  Indians  purchasing  cigarettes  off their reservations or on
another  nation's  or  tribe's  reservation,  and   non-Indians   making
cigarette  purchases  on  an Indian reservation shall not be exempt from
paying the cigarette tax when purchasing cigarettes within  this  state.
Accordingly, all cigarettes sold on an Indian reservation to non-members
of the nation or tribe or to non-Indians shall be taxed, and evidence of
such tax will be by means of an affixed cigarette tax stamp.
(b)  In  order  to ensure an adequate quantity of cigarettes on Indian
reservations which may be purchased by qualified Indians exempt from the
cigarette tax, the recognized governing body  of  an  Indian  nation  or
tribe  may  annually  elect  to  participate in the Indian tax exemption
coupon system for that year. If the  recognized  governing  body  of  an
Indian  nation  or  tribe  elects  within  the  time  specified  by  the
department to participate in the Indian tax exemption coupon system  for
that  year, the department shall provide the Indian nation or tribe with
Indian tax exemption coupons as  set  forth  in  this  section.  If  the
recognized governing body of an Indian nation or tribe does not elect to
participate  in  the Indian tax exemption coupon system for that year or
does not make this election for that year within the time  specified  by
the department, no Indian tax exemption coupons will be provided to that
Indian  nation or tribe for that year. Instead, for that year, the prior
approval system set forth  in  paragraph  (b)  of  subdivision  five  of
section four hundred seventy-one of this article shall be used. When the
recognized governing body of an Indian nation or tribe elects to use the
Indian tax exemption coupon system for a year, an Indian nation or tribe
and  a reservation cigarette seller shall be able to present such Indian
tax exemption coupons to a wholesale dealer licensed  pursuant  to  this
article  in  order  to  purchase  stamped  cigarettes  exempt  from  the
imposition  of  the  cigarette  tax.  Qualified  Indians  may   purchase
cigarettes from a reservation cigarette seller exempt from the cigarette
tax  even  though  such  cigarettes  will  have an affixed cigarette tax
stamp.
2. Indian tax exemption coupons. (a) If the recognized governing  body
of  an Indian nation or tribe timely elects to participate in the Indian
tax exemption coupon system for that year, Indian tax exemption  coupons
shall be provided to the recognized governing body of such Indian nation
or  tribe  to  ensure  that  such  Indian  nation  or  tribe  can obtain
cigarettes upon which the tax will not be collected that are for the use
or consumption by the nation or tribe or by the members of  such  nation
or  tribe.  The  Indian  tax exemption coupons shall be provided to such
Indian nations or tribes on a quarterly  basis  for  each  of  the  four
quarters  beginning  with  the  first  day of December, March, June, and
September of that year. It is intended that the Indian nations or tribes
will retain the amount of Indian tax exemption coupons  they  will  need
each  quarter  to purchase cigarettes for official nation or tribal use,
and will distribute  the  remaining  Indian  tax  exemption  coupons  to
reservation  cigarette  sellers  on  such  nations' or tribes' qualified
reservations. Only Indian nations or  tribes  or  reservation  cigarette
sellers  on  their  qualified  reservations  may  redeem such Indian tax
exemption coupons pursuant to this section.
(b) The amount of Indian tax exemption coupons  to  be  given  to  the
recognized  governing body of each Indian nation or tribe shall be based
upon the probable demand of the qualified Indians on  such  nation's  or

tribe's qualified reservation plus the amount needed for official nation
or tribal use.
(i)  Probable  demand shall be determined by reference to, among other
data, the United States average cigarette  consumption  per  capita,  as
compiled  for  the  most  recently  completed  calendar  or fiscal year,
multiplied by the number of qualified Indians  for  each  such  affected
Indian nation or tribe.
(ii)  In  making  a  determination  of probable demand, the department
shall take into consideration any evidence submitted by such  recognized
governing  body  relating  to  such  probable demand (e.g., a verifiable
record of previous sales  to  qualified  Indians  or  other  statistical
evidence)  and/or  relating  to  the  amount needed for such nation's or
tribe's official use.
(c) Each Indian tax exemption coupon  shall  consist  of  a  retention
portion for a wholesale dealer's recordkeeping purposes and a redemption
portion  for  a  wholesale  dealer's  submission  to the department when
claiming a refund as set forth in subdivision four of this section,  and
shall contain the following information:
(i) the identity of the Indian nation or tribe to which it is issued;
(ii)  the  identity  and  the  quantity of the product for which it is
issued;
(iii) the date of issuance and the date of expiration; and
(iv) any other information as the commissioner may deem appropriate.
3. Tax exempt purchaser. (a) An Indian nation or  tribe  may  purchase
cigarettes  for  its  own  official  use or consumption from a wholesale
dealer  licensed  pursuant  to  this  article  without  payment  of  the
cigarette  tax  to  the  extent that the Indian nation or tribe provides
such wholesale dealer with Indian tax exemption  coupons  entitling  the
Indian  nation  or  tribe  to  purchase such quantities of cigarettes as
allowed for on each Indian  tax  exemption  coupon  without  paying  the
cigarette tax.
(b)  A qualified Indian may purchase cigarettes for his or her own use
or consumption without payment of the cigarette tax, provided  that  the
qualified Indian makes such purchase on a qualified reservation.
(c)  A reservation cigarette seller may purchase cigarettes for resale
without payment of the cigarette tax from a  wholesale  dealer  licensed
pursuant to this article:
(i)  provided  that  such  reservation  cigarette  seller  brings such
cigarettes or causes them to be delivered onto a  qualified  reservation
for resale on such reservation;
(ii)  to  the  extent  that such reservation cigarette seller provides
such wholesale dealer with Indian tax exemption  coupons  entitling  the
reservation  cigarette  seller to purchase such quantities of cigarettes
as allowed for on each Indian tax exemption coupon  without  paying  the
cigarette tax; and
(iii)  provided  that such cigarettes are affixed with a cigarette tax
stamp.
(d) Wholesale dealers shall sell only tax-stamped cigarettes to Indian
nations  and  tribes,  reservation  cigarette  sellers  and  all   other
purchasers,  but  shall not collect the cigarette tax from any purchaser
to the extent the purchaser  gives  such  wholesale  dealer  Indian  tax
exemption coupons entitling the purchaser to purchase such quantities of
cigarettes  as  allowed  for  on  each  such Indian tax exemption coupon
without paying the cigarette tax.
4. Refunds. A wholesale dealer licensed pursuant to this  article  who
has one or more Indian tax exemption coupons may file a claim for refund
as provided for in section four hundred seventy-six of this article with
respect  to  any  cigarette  tax  previously  paid on cigarettes it sold

without collecting the tax because it accepted an Indian  tax  exemption
coupon from its purchaser pursuant to this section.
5.  Tax  agreements with Indian nations or tribes. If an Indian nation
or tribe enters into an agreement with the  state  and  the  legislature
approves   such   agreement  regarding  the  sale  and  distribution  of
cigarettes on the nation's or tribe's qualified reservation,  the  terms
of  such  agreement  shall  take  precedence over the provisions of this
article and exempt such nation from such taxes to the extent  that  such
taxes  are  specifically  referred  to in the agreement, and the sale or
distribution,  including  transportation,  of  any  cigarettes  to   the
nation's  or  tribe's  qualified reservation shall be in accordance with
the provisions of such agreement.
6. The failure of the  department  to  establish,  issue  and  provide
Indian  tax  exemption  coupons, pursuant to subdivisions one and two of
this section, or to promulgate  any  rules,  regulations  or  directives
necessary to implement the provisions of this section, shall not relieve
wholesale  dealers of the obligation to sell only tax-stamped cigarettes
to Indian nations and tribes, and to reservation cigarette sellers.