New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter I - Franchise and Certain Business Taxes › Subchapter I - Cigarette Tax, Cigarette Marketing Standards And Tobacco Products Tax › Article 3 - Tobacco Products Tax › Part 89 - Introduction And Definitions › Section 89.3 - Additional tobacco products tax on inventory

Current through Register Vol. 46, No. 28, July 10, 2024
Tax Law, §§ 471-b, 472, 473-a, 475
(a) Effective July 2, 2002, by enactment of
					 chapter 85 of the Laws of 2002, section 471-b of article 20 of the Tax Law
					 increased the tax on tobacco products possessed in New York State by any person
					 for sale from 20 percent to 37 percent of the wholesale price of such products.
					 It is presumed that all tobacco products within this State are subject to tax
					 until the contrary is established, and the burden of proving that any tobacco
					 products are not taxable shall be upon the person in possession
					 thereof.
(b) Every dealer of
					 tobacco products (whether a wholesale dealer or a retail dealer), including
					 distributors, shall take a physical inventory of all tobacco products possessed
					 in this State as of the close of business on July 1, 2002. Because it may be
					 impossible to take a physical inventory of tobacco products in all vending
					 machines that are on location throughout the State, a dealer may take as many
					 physical inventories of the contents of such machines as is possible with
					 available personnel. For those machines that cannot be physically inventoried
					 on July 1, 2002, tobacco products may be accounted for at one-half of the
					 normal fill capacities of such machines, as reflected in the individual
					 inventory records maintained for such machines.
(c)
Returns and payments.
(1)
(i) On
					 or before September 20, 2002, every such dealer shall file a return with the
					 Department of Taxation and Finance, on a form prescribed by the department for
					 such purpose, showing the quantity and wholesale price of all such tobacco
					 products possessed as of the July 1, 2002, inventory. Such return must reflect
					 the entire wholesale and/or retail inventories of the dealer within the State,
					 as required by the department, regardless of the number of business locations
					 of the dealer. Except as provided in subparagraph (ii) of this paragraph, every
					 dealer shall pay with the filing of such return an additional tobacco products
					 tax at the rate of 17 percent of the wholesale price of each tobacco product in
					 such inventory upon which the tobacco products tax has been paid at the rate of
					 20 percent. (See paragraph [2] of this subdivision for information regarding
					 the retail dealer election pertaining to wholesale price.)
(ii) Notwithstanding any other provision of
					 this Title to the contrary, a dealer who has an additional tobacco products tax
					 liability on inventory may elect to pay such tax in two installments. The first
					 installment is due with the filing of the return on or before September 20,
					 2002 and shall not be less than 25 percent of the entire additional tobacco
					 products tax due. Provided, however, in no event shall such installment be less
					 than $200 or the entire additional tobacco products tax due, if less than $200.
					 Thus, a dealer having an additional tobacco products 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 $1,000 would be liable for
					 a first installment of at least $250 ($1,000 × 25 percent). The second and
					 final installment must be paid to the department on or before January 20, 2003,
					 and must be accompanied by a final payment document prescribed by the
					 department for this purpose. Where the department has cause to believe that the
					 final installment of the additional tobacco products tax on inventory may be
					 jeopardized by delay, the department may require such payment at any time prior
					 to January 20, 2003. (See subdivision [e] of this section for sanctions
					 concerning untimely installments.)