Bill Text: NY A03431 | 2019-2020 | General Assembly | Introduced
Bill Title: Provides an exemption from the tax on cigarettes sold to or received by members of a federally recognized Indian tribe, however the tax rate on sales to non-tribal members shall be equal to the state tax rate; directs licensed agents to affix cigarette stamps to each package of cigarettes sold except certain tax-exempt cigarette sales; directs agents to affix cigarette stamps to packages within 21 days of receipt of any cigarettes; provides certain duties of manufacturers, importers, agents and dealers; requires certain reporting and recordkeeping procedures; provides certain criteria for denial of certain cigarette licenses; increases penalties for violation of the cigarette and tobacco products tax.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-01-08 - referred to ways and means [A03431 Detail]
Download: New_York-2019-A03431-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 3431 2019-2020 Regular Sessions IN ASSEMBLY January 29, 2019 ___________ Introduced by M. of A. CYMBROWITZ -- read once and referred to the Committee on Ways and Means AN ACT to amend the tax law, in relation to collecting the tax on ciga- rettes; and to repeal section 471-e and subdivision 5 of section 480-a of such law relating thereto The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivisions 8, 9 and 11 of section 470 of the tax law, 2 subdivision 8 as amended by section 1 of part K of chapter 61 of the 3 laws of 2005, subdivisions 9 and 11 as amended by chapter 61 of the laws 4 of 1989, are amended and four new subdivisions 20, 21, 22 and 23 are 5 added to read as follows: 6 8. "Wholesale dealer." Any person, whether located within or outside 7 of this state, who (a) sells cigarettes or tobacco products to retail 8 dealers or other persons for purposes of resale, or (b) owns, operates 9 or maintains one or more cigarette or tobacco product vending machines 10 in, at or upon premises owned or occupied by any other person, or (c) 11 sells cigarettes or tobacco products to an Indian nation or tribe or to 12 a reservation cigarette seller on a qualified reservation. Such term 13 shall not include any cigarette manufacturer, export warehouse proprie- 14 tor, or importer with a valid permit under 26 U.S.C. § 5712, if such 15 person sells or distributes cigarettes in this state only to licensed 16 agents, or to an export warehouse proprietor or another manufacturer 17 with a valid permit under 26 U.S.C. § 5712. 18 9. "Retail dealer." Any person, whether located within or outside of 19 this state, other than a wholesale dealer, engaged in selling cigarettes 20 or tobacco products to a consumer in this state. 21 11. "Agent." Any [person] wholesale dealer licensed by the commission- 22 er of taxation and finance to purchase and affix adhesive or meter 23 stamps on packages of cigarettes under this article. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD07490-01-9A. 3431 2 1 20. "Manufacturer" means any person who manufactures, fabricates, 2 assembles, processes, or labels a finished cigarette. 3 21. "Importer" means any person who imports into the United States, 4 either directly or indirectly, a finished cigarette for sale or distrib- 5 ution. 6 22. "Stamp" or "stamps" means the indicia, including meter 7 impressions, required to be placed on a cigarette package that evidence 8 payment of the tax on cigarettes under section four hundred seventy-one 9 of this article, or the indicia, including meter impressions, used to 10 indicate that the cigarettes are intended for a sale or distribution in 11 this state that is exempt from state tax under paragraph (a) of subdivi- 12 sion one of section four hundred seventy-one-e of this article. 13 23. "Licensed," when used with reference to a manufacturer, importer, 14 agent, wholesale dealer or retail dealer, means only those persons who 15 hold a valid and current license issued under section four hundred 16 eighty of this article for the type of business being engaged in. When 17 the term "licensed" is used before a list of entities, such as "licensed 18 manufacturer, importer, agent or dealer," such term shall apply to each 19 entity in such list. 20 § 2. Subdivisions 2 and 3 of section 471 of the tax law, subdivision 2 21 as amended by section 2 of part D of chapter 134 of the laws of 2010 and 22 subdivision 3 as amended by chapter 6 of the laws of 1961, are amended 23 to read as follows: 24 2. It is intended that the ultimate incidence of and liability for the 25 tax shall be upon the consumer, and that any agent [or dealer] who shall 26 pay the tax to the commissioner shall collect the tax from the purchaser 27 or consumer. Except as [hereinafter] provided in this subdivision, the 28 tax shall be advanced and paid by the agent. The agent shall be liable 29 for the collection and payment of the tax on cigarettes imposed by this 30 article and shall pay the tax to the commissioner by purchasing, under 31 such regulations as he or she shall prescribe, adhesive stamps of such 32 designs and denominations as he or she shall prescribe. The tax on ciga- 33 rettes may also be paid by or through the use of metering machines if 34 the commissioner so prescribes. Agents, located within or without the 35 state, shall purchase stamps and affix such stamps in the manner 36 prescribed to packages of cigarettes to be sold within the state[, in37which case any dealer subsequently receiving such stamped packages of38cigarettes will not be required to purchase and affix stamps on such39packages of cigarettes]. All cigarettes sold by agents and wholesalers 40 to Indian nations or tribes or reservation cigarette sellers located on 41 an Indian reservation must bear a tax stamp. 42 3. The amount of taxes advanced and paid by the agent as [hereinabove] 43 provided in this section shall be added to and collected as part of the 44 sales price of the cigarettes. 45 § 3. Section 471-a of the tax law, as amended by section 5 of part D 46 of chapter 134 of the laws of 2010, is amended to read as follows: 47 § 471-a. Use tax on cigarettes. There is hereby imposed and shall be 48 paid by any consumer a tax on all cigarettes used in the state by any 49 [person] such consumer, except that no tax shall be imposed (1) if the 50 tax provided in section four hundred seventy-one of this article is 51 paid, (2) on the use of cigarettes which are exempt from the tax imposed 52 by said section, or (3) on the use of four hundred or less cigarettes, 53 brought into the state on, or in the possession of, any [person] consum- 54 er. Such tax on cigarettes shall be at the rate of four dollars and 55 thirty-five cents for each twenty cigarettes or fraction thereof, 56 provided, however, that if a package of cigarettes contains more thanA. 3431 3 1 twenty cigarettes, the rate of tax on the cigarettes in such package in 2 excess of twenty shall be one dollar and eight and three-quarters cents 3 for each five cigarettes or fraction thereof. Within twenty-four hours 4 after liability for the tax accrues, each such [person] consumer shall 5 file with the commissioner a return in such form as the commissioner may 6 prescribe together with a remittance of the tax shown to be due thereon. 7 For purposes of this article, the word "use" means the exercise of any 8 right or power actual or constructive and shall include but is not 9 limited to the receipt, storage or any keeping or retention for any 10 length of time, but shall not include possession for sale, and the word 11 "consumer" means any person who uses cigarettes in this state. All 12 other provisions of this article if not inconsistent shall apply to the 13 administration and enforcement of the tax imposed by this section in the 14 same manner as if the language of said provisions had been incorporated 15 in full into this section. By filing such return and paying such tax, a 16 consumer shall not be relieved of any criminal or civil penalties that 17 may be applicable under this article or article thirty-seven of this 18 chapter. 19 § 4. Section 471-e of the tax law is REPEALED and a new section 471-e 20 is added to read as follows: 21 § 471-e. Application of tax on tribal lands. 1. Exemption from tax. 22 (a) Cigarettes sold to or received by members of a federally recognized 23 Indian tribe on such tribe's Indian country shall not be subject to tax 24 under this article. 25 (b) Cigarettes exempt from tax under 26 U.S.C. § 5701 and that are 26 distributed in accordance with federal regulations shall not be subject 27 to tax under this article. 28 2. Tax rate on sales to non-tribal members on Indian country. The tax 29 rate applicable to cigarettes sold to or received by non-tribal members 30 on Indian lands shall be equal to the state tax rate provided in section 31 four hundred seventy-one of this article minus any tribal tax rate, if 32 the resulting rate is a positive number and such rate shall be zero if 33 the resulting rate would be a negative number. Cigarettes taxed pursuant 34 to this subdivision shall bear a tax stamp as required by section four 35 hundred seventy-two of this article in an amount equal to the tax 36 imposed by section four hundred seventy-one of this article; provided, 37 that the commissioner shall periodically rebate to any Indian tribal 38 entity that is in compliance with this article an amount equal to the 39 tribal tax imposed on sales under this subdivision or the face value of 40 the tax stamps affixed to cigarettes under this subdivision, whichever 41 amount is less. 42 § 5. Subdivision 1 of section 472 of the tax law, as amended by chap- 43 ter 629 of the laws of 1996 and as further amended by section 104 of 44 part A of chapter 62 of the laws of 2011, is amended, subdivisions 2 and 45 3 are renumbered subdivisions 3 and 4 and a new subdivision 2 is added 46 to read as follows: 47 1. The commissioner shall prescribe, prepare and furnish stamps of 48 such denominations and quantities as may be necessary for the payment of 49 the tax on cigarettes imposed by this article, or for indication that 50 the cigarettes are tax-exempt under section four hundred seventy-one-e 51 of this article, and may from time to time and as often as he or she 52 deems advisable provide for the issuance and exclusive use of stamps of 53 a new design and forbid the use of stamps of any other design, in the 54 manner and with the effect provided in section two hundred seventy-four 55 of this chapter. The commissioner shall make provisions for the sale of 56 such stamps at such places and at such times as he or she may deemA. 3431 4 1 necessary and may license agents for such purpose. The commissioner may 2 license wholesale dealers in cigarettes, who maintain separate warehous- 3 ing facilities for the purpose of receiving and distributing cigarettes 4 and conducting their business, and who have received commitments from at 5 least two cigarette manufacturers whose aggregate market share is at 6 least forty percent of the New York state cigarette market, [and import-7ers, exporters and manufacturers of cigarettes, and other persons within8or without the state as] or are themselves also licensed as manufactur- 9 ers, importers or agents to buy [or] and affix stamps to be used in 10 paying the tax [herein] imposed by this article. No person other than a 11 licensed agent may purchase or affix stamps and agents shall not sell or 12 provide such stamps to any other agent or person, but an agent shall at 13 all times have the right to appoint the person in his or her employ who 14 is to affix the stamps to any cigarettes under the agent's control. The 15 fee for filing such application for an agent's license shall be one 16 thousand five hundred dollars, unless such fee has been paid during the 17 preceding twelve months, in which case, the fee for a new license shall 18 be one thousand dollars. All of the provisions of section four hundred 19 eighty of this article relating to wholesale dealers' licenses, includ- 20 ing the procedure for suspension, revocation, refusal to license and for 21 hearings, except for paragraphs (c) and [(g)] (f) of subdivision one of 22 such section, shall be applicable to agents' licenses applied for or 23 granted pursuant to this section, as if such provisions had been set 24 forth in full in this subdivision and had expressly referred to the 25 applicant for, or the holder of, an agent's license. Whenever the 26 commissioner shall sell and deliver to any such agent any such stamps, 27 such agent shall be entitled to receive as compensation for his or her 28 services and expenses as such agent in [selling or] affixing such 29 stamps, and to retain out of the moneys to be paid by him or her for 30 such stamps, a commission on the par value thereof. The commissioner is 31 hereby authorized to prescribe a schedule of commissions, not exceeding 32 five per centum, allowable to such agent for buying and affixing such 33 stamps. Such schedule shall be uniform with respect to the different 34 types of stamps used, and may be on a graduated scale with respect to 35 the number of stamps purchased. The commissioner may, in his or her 36 discretion, permit an agent to pay for such stamps within thirty days 37 after the date of purchase and may require any such agent to file with 38 the department [of taxation and finance] a bond issued by a surety 39 company approved by the superintendent of financial services as to 40 solvency and responsibility and authorized to transact business in the 41 state or other security acceptable to the commissioner, in such amount 42 as the commissioner may fix, to secure the payment of any sums due from 43 such agent pursuant to this article. If securities are deposited as 44 security under this subdivision, such securities shall be kept in the 45 custody of the commissioner and may be sold by the commissioner if it 46 becomes necessary so to do in order to recover any sums due from such 47 agent pursuant to this article, but no such sale shall be had until 48 after such agent shall have had opportunity to litigate the validity of 49 any tax if it elects so to do. Upon any such sale, the surplus, if any, 50 above the sums due under this article shall be returned to such agent. 51 2. Stamps shall be applied by a licensed agent to each package of 52 cigarettes sold or distributed within this state as follows: (a) A tax 53 stamp shall be applied to all cigarette packages containing cigarettes 54 subject to state tax under this article, including to cigarettes subject 55 to reduced state tax under subdivision two of section four hundred 56 seventy-one-e of this article.A. 3431 5 1 (b) Except as provided in paragraph (c) of this subdivision, a tax-ex- 2 empt stamp shall be applied to all cigarette packages intended for sale 3 or distribution to consumers not subject to state tax under paragraph 4 (a) of subdivision one of section four hundred seventy-one-e of this 5 article. 6 (c) No stamp shall be applied to any cigarette package exempt from tax 7 under paragraph (b) of subdivision one of section four hundred seventy- 8 one-e of this article. 9 § 6. Section 473 of the tax law, as amended by chapter 489 of the laws 10 of 1940, is amended to read as follows: 11 § 473. Affixation and cancellation of stamps; presumption. Each agent 12 [shall affix] within [the time hereinafter prescribed] twenty-one calen- 13 dar days of receipt of any cigarettes, shall affix to each package of 14 such cigarettes, stamps evidencing the payment of the tax imposed by 15 this article or stamps evidencing the exemption from payment of the tax 16 imposed by this article and shall cancel such stamps, with a number 17 unique to such agent that is legible at the point of sale, before such 18 cigarettes are offered for sale or before they are otherwise disposed 19 of, unless stamps have been affixed to such packages of cigarettes and 20 cancelled before such agent received them. Each dealer, other than an 21 agent, shall immediately upon the receipt of any cigarettes at his or 22 her place of business mark in ink on each unopened box, carton or other 23 container of such cigarettes the word "received" and the year, month, 24 day and hour of such receipt, and shall affix his or her signature ther- 25 eto, or in any other manner prescribed. 26 Each retail dealer shall open such box, carton or other container 27 within twenty-four hours after such receipt and prior to exposing for 28 sale or selling such cigarettes and examine the packages contained ther- 29 ein for the purpose of ascertaining whether or not the said packages 30 have affixed thereto the proper tax stamp; if unstamped or improperly 31 stamped packages of cigarettes are discovered, the retail dealer shall 32 immediately notify the wholesale dealer from whom said cigarettes were 33 purchased. Upon such notification, the wholesale dealer from whom said 34 cigarettes were purchased will replace such unstamped or improperly 35 stamped packages of cigarettes with those upon which stamps have been 36 properly affixed. 37 Whenever any cigarettes are found in the place of business of such 38 dealer, other than an agent, without the stamps affixed and cancelled, 39 or not marked as having been received within the preceding twenty-four 40 hours, the presumption shall be that such cigarettes are kept therein in 41 violation of the provisions of this article. Stamps shall be affixed to 42 each package of cigarettes of an aggregate denomination not less than 43 the amount of the tax upon the contents therein, and shall be affixed in 44 such manner as to be visible to the purchaser. 45 § 7. The tax law is amended by adding a new section 473-c to read as 46 follows: 47 § 473-c. Duties of manufacturers, importers, agents, and dealers. 1. 48 Agents may apply stamps only to cigarette packages that they have 49 received directly from a licensed manufacturer or importer of ciga- 50 rettes. 51 2. Agents shall be permitted to set aside, without application of 52 stamps, only such part of the agent's stock that is identified for sale 53 or distribution outside of this state; provided, that any such unstamped 54 cigarettes shall be stored separately from stamped cigarette packages. 55 No agent shall transfer unstamped cigarette packages to another facility 56 of the agent within this state or to another person within this state.A. 3431 6 1 3. A manufacturer or importer may sell or distribute cigarettes to a 2 person located or doing business within this state (including on any 3 tribal lands located within this state) only if such person is a 4 licensed importer or agent. An importer may obtain cigarettes only from 5 a licensed manufacturer. An agent may obtain cigarettes only from a 6 licensed manufacturer, importer or agent. An agent may sell or distrib- 7 ute cigarettes to a person located or doing business within this state 8 (including on any tribal lands located within this state) only if such 9 person is a licensed agent, wholesale dealer or retail dealer. A retail 10 dealer may obtain cigarettes only from a licensed agent or wholesale 11 dealer. 12 4. Any person who is doing business both as an agent and a wholesale 13 dealer or a retail dealer, shall maintain separate areas for stamped and 14 unstamped product. 15 5. (a) A retail dealer shall report to the commission each sale or 16 distribution of more than one thousand cigarettes to any consumer in any 17 single transaction. Such report shall include: 18 (i) the name, address, destination (including street address), vehicle 19 license number, driver's license number, signature of the person receiv- 20 ing such cigarettes, and the name of the purchaser; 21 (ii) a declaration of the specific purpose of the receipt (personal 22 use, resale, or delivery to another); and 23 (iii) a declaration of the name and address of the recipient's princi- 24 pal in all cases when the recipient is acting as an agent. 25 (b) A retail dealer shall not knowingly sell more than one thousand 26 cigarettes to any person in any series of transactions in any two-day 27 period without filing a report as required by paragraph (a) of this 28 subdivision. 29 § 8. Subdivisions 1 and 4 of section 474 of the tax law, as amended by 30 chapter 61 of the laws of 1989, are amended to read as follows: 31 1. (a) Every person who shall possess or transport any unstamped ciga- 32 rettes upon the public highways, roads or streets of the state, shall be 33 required to have in his or her actual possession invoices or delivery 34 tickets for such cigarettes. Such invoices or delivery tickets shall 35 show the name and address of the consignor or seller, the name and 36 address of the consignee or purchaser, the quantity [and brands] by 37 brand style of the cigarettes transported, and the name and address of 38 the person who has or shall assume the payment of the tax. The absence 39 of such invoices or delivery tickets shall be prima facie evidence that 40 such person is a dealer in cigarettes in this state and subject to the 41 provisions of this article. 42 (b) Any person who ships unstamped cigarette packages into this state 43 other than to a licensed manufacturer, importer or agent shall first 44 file with the commissioner notice of such shipment. This paragraph shall 45 not apply to any common or contract carrier that is transporting ciga- 46 rettes through this state to another location under a proper bill of 47 lading or freight bill, which states the quantity by brand style, 48 source, and destination of such cigarettes. 49 4. At the time of delivering cigarettes to any person each manufactur- 50 er, importer, agent or wholesale dealer, and at the time of delivering 51 tobacco products to any person each distributor or wholesale dealer of 52 tobacco products, shall make a true duplicate invoice showing the date 53 of delivery, the number of packages by brand style and number of ciga- 54 rettes contained therein, in each shipment of cigarettes delivered, and 55 the items and quantity and wholesale price of each item in each shipment 56 of tobacco products delivered, and the name of the purchaser to whomA. 3431 7 1 delivery is made, and shall retain the same for a period of [three] five 2 years subject to the use and inspection of the commissioner [of taxation3and finance]. Each dealer shall procure and retain invoices showing the 4 number of packages by brand style and number of cigarettes contained 5 therein, in each shipment of cigarettes received by him or her, and the 6 items and quantity and wholesale price of each item in each shipment of 7 tobacco products received by him or her, the date thereof, and the name 8 of the shipper, and shall retain the same for a period of [three] five 9 years subject to the use and inspection of the commissioner [of taxation10and finance]. The commissioner [of taxation and finance] by regulation 11 may provide that whenever cigarettes or tobacco products are shipped 12 into the state, the railroad company, express company, trucking company 13 or other public carrier transporting any shipment thereof shall file 14 with the commissioner [of taxation and finance] a copy of the freight 15 bill within ten days after the delivery in the state of each shipment. 16 All dealers shall maintain and keep for a period of [three] five years 17 such other records of cigarettes or tobacco products received, sold or 18 delivered within the state as may be required by the commissioner [of19taxation and finance]. The commissioner [of taxation and finance] is 20 hereby authorized to examine the books, papers, invoices and other 21 records of any person who holds a license or registration under this 22 article or who is in possession, control or occupancy of any premises 23 where cigarettes or tobacco products are placed, stored, sold or offered 24 for sale, and the equipment of any such person pertaining to the stamp- 25 ing of cigarettes or the sale and delivery of cigarettes or tobacco 26 products taxable under this article, as well as the stock of cigarettes 27 or tobacco products in any such premises or vehicle. To verify the accu- 28 racy of the tax imposed and assessed by this article, each such person 29 is hereby directed and required to give to the commissioner [of taxation30and finance] or his or her duly authorized representatives, the means, 31 facilities and opportunity for such examinations as are [herein] 32 provided for in this section and required. All invoices required to be 33 retained by this section shall show the name and address of the seller 34 and the quantity by brand style of the cigarettes involved in the trans- 35 action and shall be itemized for each facility of the manufacturer, 36 importer, agent or wholesale dealer. Records required under this arti- 37 cle shall be preserved on the premises described in the relevant license 38 or registration in such a manner as to ensure permanency and accessibil- 39 ity for inspection at reasonable hours by authorized personnel of the 40 tax commission. With the permission of the commissioner, persons with 41 multiple places of business may retain centralized records, but shall 42 transmit duplicates of the invoices or the equivalent documentation to 43 each place of business within twenty-four hours upon the request of the 44 commissioner. 45 The commissioner and his or her designees and the United States secre- 46 tary of the treasury or his or her designee, upon request, shall have 47 access to records required under this section and reports required under 48 section four hundred seventy-four-a of this article. The commissioner at 49 his or her sole discretion may share the records and reports required by 50 this article with other law enforcement officials of the federal govern- 51 ment or other states. Public access to reports submitted by licensees 52 shall be provided under the procedures established by the New York free- 53 dom of information law. In no case, however, shall information about 54 quantities of cigarettes by brand style be released to anyone other than 55 the commissioner, the United States secretary of the treasury, or otherA. 3431 8 1 state and federal law enforcement officials with whom the commissioner 2 has elected to share reports and records required by this article. 3 § 9. The tax law is amended by adding a new section 474-a to read as 4 follows: 5 § 474-a. Reports. 1. Agents and dealers shall submit to the commis- 6 sioner monthly reports setting forth the following information, itemized 7 or submitted separately for each of their places of business: (a) the 8 quantities of cigarettes, by brand style, on hand both at the beginning 9 and ending of the reporting period; 10 (b) the quantities of cigarettes, by brand style and transaction, that 11 were received during the reporting period and the name and address of 12 each person from whom those products were received; 13 (c) the quantities of cigarettes, by brand style and transaction, 14 distributed or shipped into this state or between locations in this 15 state during the reporting period (other than sales directly to consum- 16 ers) and the name and address of each person to whom those products were 17 distributed or shipped; 18 (d) the quantities of cigarettes, by brand style and transaction, 19 distributed or shipped to any destination wherever located, including 20 the quantities reported under paragraph (c) of this subdivision, during 21 the reporting period (other than sales directly to consumers) and the 22 name and address of each person to whom those products were distributed 23 or shipped; and 24 (e) the quantities of cigarettes, by brand style, sold to consumers, 25 itemized to show sales to consumers in this state and sales to consumers 26 outside of this state. 27 2. Manufacturers and importers shipping cigarettes into or within this 28 state shall file a monthly report with the commissioner containing the 29 information regarding such cigarettes set forth in paragraph (c) of 30 subdivision one of this section. 31 3. Indian tribal entities engaged in the retail sale or distribution 32 of cigarettes shall include in such entities' reports submitted pursuant 33 to subdivision one of this section the names and addresses of every 34 tribal member that purchased cigarettes during the reporting period and 35 the quantity of cigarettes, by brand style, purchased by each such 36 tribal member. 37 4. The reports submitted pursuant to subdivision one of this section 38 shall be further itemized to disclose the quantity of reported ciga- 39 rettes bearing tax stamps of this state, tax exempt stamps of this 40 state, stamps of another state, and unstamped cigarettes. Agent reports 41 shall include, if applicable, the quantity of New York tax and tax 42 exempt stamps that were not affixed to cigarettes and that were on hand 43 at the beginning and ending of the reporting period, the quantity of 44 each type of New York stamp received during the reporting period, and 45 the quantity of each type of New York stamp applied during the reporting 46 period. 47 5. The commissioner may issue regulations requiring such additional 48 information in the monthly reports as he or she may determine is neces- 49 sary or appropriate for purposes of enforcing the provisions of this 50 article. 51 § 10. Section 475 of the tax law is amended by adding a new closing 52 paragraph to read as follows: 53 In any case where the commissioner or his or her duly authorized 54 agent, or any police or peace officer of New York state, has knowledge 55 or reasonable grounds to believe that any vehicle is transporting ciga- 56 rettes in violation of this article, the commissioner, such agent, orA. 3431 9 1 such police or peace officer, is authorized to stop such vehicle and to 2 inspect the same for contraband cigarettes. 3 § 11. Section 476 of the tax law, as amended by chapter 61 of the laws 4 of 1989, is amended to read as follows: 5 § 476. Refunds; sales of stamps. Whenever any cigarettes upon which 6 stamps have been placed or tobacco products upon which the tax has been 7 paid have been sold and shipped into another state for sale or use there 8 or have become unfit for use and consumption or unsalable, or have been 9 destroyed (except for cigarettes destroyed pursuant to section eighteen 10 hundred forty-six of this chapter), or whenever the commissioner [of11taxation and finance] shall have determined that any tax imposed by this 12 article shall have been paid in error, the agent, dealer or tobacco 13 products distributor, as the case may be, shall be entitled to a refund 14 of the actual amount of tax so paid, provided application therefor is 15 filed with the commissioner [of taxation and finance] within two years 16 after the stamps were affixed to such cigarettes or the tax was paid 17 upon such tobacco products, except if an agreement under the provisions 18 of section four hundred seventy-eight of this article (extending the 19 period for determination of tax imposed by this article) is made within 20 the two-year period for the filing of an application for refund provided 21 for in this section, the period for filing an application for refund 22 shall not expire prior to six months after the expiration of the period 23 within which a determination may be made pursuant to the agreement or 24 any extension thereof. If the commissioner [of taxation and finance] is 25 satisfied that any agent or dealer is entitled to a refund he or she 26 shall issue to such [dealer] agent stamps of sufficient value to cover 27 the refund of the tax on cigarettes or may, subject to audit by the 28 comptroller, make a refund of the tax on cigarettes or on tobacco 29 products to such agent. No person shall sell or offer for sale any stamp 30 or stamps issued under this article except by written permission of the 31 commissioner [of taxation and finance]. The commissioner [of taxation32and finance] may redeem unused stamps lawfully in possession of any 33 [person] agent. The commissioner [of taxation and finance] may prescribe 34 necessary rules and regulations concerning refunds, sales of stamps, and 35 redemptions under the provisions of this article. 36 § 12. Subdivisions 1, 5 and paragraph (a) of subdivision 6 of section 37 480 of the tax law, subdivision 1 as amended by chapter 629 of the laws 38 of 1996, paragraph (c) of subdivision 1 as further amended by section 39 104 of part A of chapter 62 of the laws of 2011, paragraph (k) of subdi- 40 vision 1 as amended by chapter 262 of the laws of 2000, subdivision 5 as 41 added by chapter 860 of the laws of 1987 and paragraph (a) of subdivi- 42 sion 6 as amended by chapter 576 of the laws of 1994, are amended, 43 subdivision 3 is amended by adding a new paragraph (c) and a new subdi- 44 vision 7 is added to read as follows: 45 1. General. (a) [On and after July first, nineteen hundred thirty-nine46no] No person shall be a manufacturer, importer, agent, or wholesale 47 dealer unless he or she has been granted and publicly displays in his or 48 her place of business a license from the department for each such activ- 49 ity engaged in. Each place of business in this state shall be separately 50 licensed. If the applicant does not have a place of business in this 51 state, the license shall be issued for such applicant's principal place 52 of business, wherever located. Applications for licenses shall be made 53 on forms prescribed by the commissioner. Each application shall state 54 the name and address of the applicant; the address of the applicant's 55 principal place of business; each place of business where the appli- 56 cant's business will be conducted within this state; and any otherA. 3431 10 1 information such commissioner may require. If the applicant is a firm, 2 partnership, or association, the application shall state the name and 3 address of each of its members. If the applicant is a corporation, the 4 application shall state the name and address of each of its members. If 5 the applicant is a corporation, the application shall state the name and 6 address of each of its officers and the name of any person who owns, 7 directly or indirectly, in the aggregate, more than ten percent of the 8 ownership interests in the corporation. 9 (b) Applications shall be accompanied by proof of the applicant's 10 financial responsibility, including, but not limited to, satisfactory 11 proof of a minimum net worth of twenty-five thousand dollars if the 12 applicant is an individual, or net worth in the capitalization of the 13 business if the applicant is not an individual equal to a minimum of 14 twenty-five thousand dollars. 15 (c) Each applicant shall file with the department a bond issued by a 16 surety company approved by the superintendent of financial services as 17 to solvency and responsibility and authorized to transact business in 18 the state, in the face amount of ten thousand dollars, to secure payment 19 of any sums due for any violation of this article [twenty] or article 20 twenty-A of this chapter, or the regulations of the commissioner there- 21 under. 22 (d) [Each applicant shall file satisfactory proof that it will main-23tain a secure separate warehousing facility for the purpose of receiving24and distributing cigarettes or tobacco products and conducting its25wholesale business. Such proof shall consist of a copy of a deed, or a26copy of an executed lease for a minimum period of two years, to a sepa-27rate, secure warehouse. If the applicant carries on another business in28conjunction with the warehouse facility, the other business shall also29be identified.30(e)] Each applicant shall file satisfactory proof that it will provide 31 disability and workers' compensation insurance for its employees. 32 [(f)] (e) Each applicant shall submit proof of United States citizen- 33 ship or eligibility to obtain employment within the United States if not 34 a citizen. If the applicant is not an individual, such proof shall be 35 submitted with respect to each controlling person of the applicant. 36 [(g)] (f) The fee for the filing of an application for a license shall 37 be fifteen hundred dollars, unless such fee has been paid during the 38 preceding twelve months, in which case, the fee for a new license shall 39 be one thousand dollars. Each application shall be accompanied by a 40 certified check for the required application fee. 41 [(h)] (g) Except as provided in subdivision four of this section, a 42 license shall continue in effect [until revoked or suspended for cause43or surrendered] for such length of time as determined by regulations of 44 the commissioner; in no case, however, shall a license issued under this 45 section remain in effect for a period longer than three years. 46 [(i)] (h) A license shall not be assignable but an applicant who is 47 purchasing the business of a licensee shall file a copy of the contract 48 of sale and any related documents with its application. 49 [(j)] (i) The commissioner may for cause refuse to issue, or may 50 suspend or revoke [a wholesaler's] any license under this section, or 51 may forbid a retail dealer to continue selling cigarettes or tobacco 52 products or may forbid a person required to be appointed as a distribu- 53 tor of tobacco products who has not been so appointed from selling ciga- 54 rettes or tobacco products, after an opportunity for hearing has been 55 afforded. A violation of any provision of this article or of any regu- 56 lation issued under it shall be cause to suspend or revoke a licenseA. 3431 11 1 issued under this section or to forbid a retail dealer to continue sell- 2 ing cigarettes or tobacco products. 3 [(k)] (j) No agent shall sell cigarettes and no distributor shall sell 4 tobacco products to an unlicensed wholesale dealer, or to a wholesale 5 dealer whose license has been suspended or revoked, or to a retail deal- 6 er who is not registered under section four hundred eighty-a of this 7 article, or whose registration has been suspended or revoked, and no 8 wholesale dealer shall sell cigarettes or tobacco products to a retail 9 dealer who is not registered under section four hundred eighty-a of this 10 article, or whose registration has been suspended or revoked, and no 11 retail dealer shall sell cigarettes or tobacco products unless such 12 dealer is registered under section four hundred eighty-a of this arti- 13 cle. 14 [(l)] (k) Paragraphs (b), (c) and [(g)] (f) of this subdivision shall 15 not apply to the filing of an application for a license as a wholesale 16 dealer that is based solely upon the ownership, operation or maintenance 17 of one or more cigarette or tobacco products vending machines in, at or 18 upon premises owned or occupied by another person, or that is based 19 solely upon the sale of tobacco products for resale, or that is based 20 upon both the ownership, operation or maintenance of one or more ciga- 21 rette or tobacco products vending machines in, at or upon premises owned 22 or occupied by another person and the sale of tobacco products for 23 resale. 24 (c) License availability. Notwithstanding other subdivisions of this 25 section, no license shall be granted, maintained or renewed if the 26 applicant or any controlling person: 27 (i) Owes five hundred dollars or more in delinquent cigarette taxes; 28 (ii) Had a license under this section or registration under section 29 four hundred eighty-a of this article revoked by the commissioner within 30 the past two years; 31 (iii) Has been convicted of a crime relating to stolen or counterfeit 32 cigarettes; 33 (iv) Is a cigarette manufacturer or importer that is neither (A) a 34 participating manufacturer (as such term is defined in section II(jj) of 35 the master settlement agreement) as required in subdivision one of 36 section thirteen hundred ninety-nine-pp of the public health law; nor 37 (B) in full compliance with section four hundred eighty-b of this arti- 38 cle and subdivision two of section thirteen hundred ninety-nine-pp of 39 the public health law; 40 (v) Has imported, or caused to be imported, into the United States any 41 cigarette in violation of 19 U.S.C. 1681a; or 42 (vi) Has imported, or caused to be imported into the United States, or 43 manufactured for sale or distribution in the United States any cigarette 44 that does not fully comply with the Federal Cigarette Labeling and 45 Advertising Act (15 U.S.C. 1331, et seq.). 46 5. Hearing procedure. (a) General. A notice of proposed cancellation 47 or suspension of a license or refusal to issue a license shall be given 48 to [the wholesale dealer] any person licensed pursuant to this article 49 or to an applicant applying for such license in the manner prescribed 50 for a notice of deficiency of tax and all the provisions applicable to a 51 notice of deficiency under article twenty-seven of this chapter, includ- 52 ing, but not limited to, those provisions authorizing the [tax commis-53sion] commissioner to abate on its own motion, shall apply to a notice 54 issued pursuant to this subdivision, insofar as such provisions can be 55 made applicable to a notice authorized by this subdivision, with such 56 modifications as may be necessary in order to adapt the language of suchA. 3431 12 1 provisions to the notice authorized by this subdivision. Such notice of 2 proposed cancellation or suspension or of proposed refusal to license 3 must be given to such person within five years from the date of the act 4 or omission referred to in subdivision two or three of this section, 5 except that in the case of acts involving falsity or fraud, such notice 6 may be issued at any time. All of such notices shall contain a statement 7 advising the person to whom it is issued that the cancellation, suspen- 8 sion or refusal to license may be challenged through a hearing process 9 and that the petition for such challenge must be filed with the [tax10commission] commissioner within ninety days after the giving of such 11 notice. Where a license is cancelled or suspended prior to a hearing, 12 the cancellation or suspension may be challenged through the hearing 13 process provided the petition for such challenge is filed within ninety 14 days after the giving of notice of such cancellation or suspension. 15 (b) Refusal to license. In the case of a person applying to be 16 licensed [as a wholesale dealer] under this article, a notice of 17 proposed refusal to license shall be issued promptly after application 18 for license is received by the [tax commission] commissioner. Upon 19 timely application therefor, a hearing shall be scheduled, and within 20 three months from such application for hearing (determined with regard 21 to any postponements of any scheduled hearing or conference or other 22 delay made at the request of the applicant) the [tax commission] commis- 23 sioner shall issue a notice of refusal to license or shall license the 24 applicant. If the [tax commission] commissioner fails to issue a notice 25 of refusal to license within such three month period (or such period as 26 extended pursuant to this paragraph), the [tax commission] commissioner 27 shall license the applicant immediately upon the conclusion of such 28 period so long as the applicant has filed a bond or other security as 29 required by the [tax commission] commissioner. 30 (a) An officer, director or partner or, in the case of a limited 31 liability company, a member or a person having with respect to such 32 limited liability company authority analogous to that of an officer or 33 director with respect to a corporation of an applicant for a [wholesale34dealer's] license under this article or of a licensee under this arti- 35 cle, or 36 7. Maintenance of list of licensees. The commissioner shall create and 37 maintain a website setting forth the identity of persons holding valid 38 and current licenses under this section, itemized by type of license 39 possessed, and the identity of persons holding valid and current regis- 40 trations under section four hundred eighty-a of this article, and shall 41 update the site no less frequently than once per month. 42 § 13. Paragraph (d) of subdivision 1, and paragraph (a) of subdivision 43 4 of section 480-a of the tax law, paragraph (d) of subdivision 1 as 44 added by chapter 799 of the laws of 1992, and paragraph (a) of subdivi- 45 sion 4 as added by chapter 629 of the laws of 1996, are amended to read 46 as follows: 47 (d) (i) The commissioner shall not register retail dealers or vending 48 machines or such registration may be cancelled or suspended by the 49 commissioner upon notification that the applicant or retail dealer, or 50 any combination of persons owning directly or indirectly, in the aggre- 51 gate, more than ten percent of the ownership interests in the applicant 52 or retail dealer has been convicted in a criminal proceeding of a 53 violation of subdivision [five] three of section [260.20] 260.21 of the 54 penal law or as directed by an enforcement officer pursuant to article 55 thirteen-F of the public health law. The clerk of the court shall 56 promptly report all criminal convictions under subdivision [five] threeA. 3431 13 1 of section [260.20] 260.21 of the penal law to the commissioner, togeth- 2 er with a direction to the commissioner to cancel such registration or 3 to suspend it for a specified period of time. 4 (ii) The commissioner shall not register retail dealers or vending 5 machines or such registration shall be cancelled or suspended by the 6 commissioner upon notification that the applicant or retail dealer, or 7 any combination of persons owning directly or indirectly, in the aggre- 8 gate, more than ten percent of the ownership interests in the applicant 9 or retail dealer: 10 (A) Owes five hundred dollars or more in delinquent cigarette taxes; 11 (B) Had a registration issued under this section or a license issued 12 under section four hundred eighty of this article revoked by the commis- 13 sioner within the past two years; or 14 (C) Has been convicted of a crime relating to counterfeit cigarettes. 15 Anything to the contrary in any law notwithstanding, retail dealers 16 shall have no right to a hearing under this chapter and shall have no 17 right to commence a court action or proceeding or to any other legal 18 recourse against the commissioner with respect to any action taken by 19 the commissioner under this paragraph, provided nothing herein shall be 20 construed to deny retail dealers a hearing under article thirteen-F of 21 the public health law or to prohibit retail dealers from commencing a 22 court action or proceeding against an enforcement officer as defined in 23 section thirteen hundred ninety-nine-aa of the public health law. 24 [(ii)] (iii) Anything to the contrary in any law notwithstanding, the 25 commissioner shall provide upon request to an enforcement officer as 26 defined in section thirteen hundred ninety-nine-aa of the public health 27 law such registration information as is relevant and necessary for the 28 implementation of article thirteen-F of the public health law. 29 (a) If a retail dealer possesses or sells unstamped or unlawfully 30 stamped packages of cigarettes, [or if a retail dealer is also licensed31as an agent pursuant to section four hundred seventy-two and it32possesses unlawfully stamped packages of cigarettes or sells unstamped33or unlawfully stamped packages of cigarettes at retail,] (i) its regis- 34 tration shall be suspended for a period of not more than six months, or 35 (ii) for a second such possession or sale within a period of five years, 36 its registration shall be suspended for a period of up to thirty-six 37 months, or (iii) for a third such possession or sale within a period of 38 five years, its registration may be revoked for a period of up to five 39 years. A retail dealer registration shall be suspended or revoked pursu- 40 ant to this subdivision immediately upon such dealer's receipt of writ- 41 ten notice of suspension or revocation from the commissioner. [If a42retail dealer sells cigarettes through more than one place of business43in this state, the retail dealer registration shall not be suspended or44revoked pursuant to this subdivision, but the certificate of registra-45tion issued to the place of business, cart, stand, truck or other46merchandising device where unstamped or unlawfully stamped cigarettes47were found shall be suspended or cancelled for possession or sale of48unstamped or unlawfully stamped packages of cigarettes, as if such49certificate of registration were a retail dealer registration. A suspen-50sion or cancellation of a certificate of registration shall be treated51as if it were a suspension or revocation of a registration. If unstamped52or unlawfully stamped cigarettes are found in a retail dealer's ware-53house, the] The suspension or revocation of the retail dealer's regis- 54 tration pursuant to this subdivision shall be applicable to each retail 55 place of business in this state through which such retail dealer sells 56 cigarettes. If a retail dealer commits any violation other than thoseA. 3431 14 1 described in this subdivision or subdivision one of this section, the 2 commissioner may suspend or revoke the retail dealer's registration. 3 § 14. Subdivision 5 of section 480-a of the tax law is REPEALED. 4 § 15. Subparagraph (v) of paragraph (a) of subdivision 1 and paragraph 5 (b) of subdivision 2 of section 481 of the tax law, subparagraph (v) of 6 paragraph (a) of subdivision 1 as amended by chapter 65 of the laws of 7 1985 and paragraph (b) of subdivision 2 as amended by chapter 61 of the 8 laws of 1989, are amended, subdivision 4 is renumbered subdivision 9 and 9 five new subdivisions 4, 5, 6, 7 and 8 are added to read as follows: 10 (v) The penalties and interest provided for in this paragraph, in 11 addition to any other penalty imposed by this article, shall be deter- 12 mined, assessed, collected and paid in the same manner as the taxes 13 imposed by this article and shall be disposed of as [hereinafter] 14 provided in this subdivision with respect to moneys derived from the 15 tax. Interest under this paragraph shall be compounded daily. 16 (b) Nothing in this section shall apply to common or contract carriers 17 or warehousemen while engaged in lawfully transporting [or storing] 18 tobacco products or unstamped packages of cigarettes as merchandise 19 through this state to another location under a proper bill of lading or 20 freight bill, or storing tobacco products or unstamped cigarettes on 21 behalf of a licensed agent, nor to any employee of such carrier or ware- 22 houseman acting within the scope of his or her employment, nor to public 23 officers or employees in the performance of their official duties 24 requiring possession or control of tobacco products or unstamped or 25 unlawfully stamped packages of cigarettes, nor to temporary incidental 26 possession by employees or agents of persons lawfully entitled to 27 possession, nor to persons whose possession is for the purpose of aiding 28 police officers in performing their duties. 29 4. Whoever omits, neglects, or refuses to comply with any duty imposed 30 upon him or her by this article, or to do, or cause to be done, any of 31 the things required by this article, or does anything prohibited by this 32 article, shall, in addition to any other penalty provided in this arti- 33 cle or article thirty-seven of this chapter, be liable to a penalty of 34 five thousand dollars or five times the retail value of the cigarettes 35 involved, whichever is greater, to be recovered, with costs of suit, in 36 a civil action. 37 5. Whoever fails to pay any tax imposed by this article at the time 38 prescribed by law or regulations, shall, in addition to any other penal- 39 ty provided in this article, be liable to a penalty of five times the 40 tax due but unpaid. 41 6. All cigarettes which are held for sale, distribution or use within 42 the borders of this state in violation of the requirements of this arti- 43 cle shall be forfeited to the state. 44 7. (a) Whoever, with intent to defraud this state, fails to comply 45 with any requirement of this article or regulations prescribed pursuant 46 to this article shall, for each such offense, in addition to any other 47 penalty provided in this article or article thirty-seven of this chap- 48 ter, be fined ten thousand dollars or be imprisoned for not more than 49 five years, or both. 50 (b) Whoever knowingly violates any provision of this article or of 51 regulations prescribed pursuant to this article shall, for each such 52 offense, in addition to any other penalty provided in this article, be 53 fined not more than five thousand dollars or five times the retail value 54 of the cigarettes involved, whichever is greater, or imprisoned not more 55 than one year, or both.A. 3431 15 1 8. Notwithstanding any other provision of law, the sale or possession 2 for sale of counterfeit cigarettes by a manufacturer, importer, agent, 3 or dealer shall result in the seizure of the product and related machin- 4 ery by the commissioner or any law enforcement agency and shall be 5 punishable as follows: (a) A first violation with a total quantity of 6 less than two cartons of cigarettes shall be punishable by a fine of one 7 thousand dollars or five times the retail value of the cigarettes 8 involved, whichever is greater, or imprisonment not to exceed five 9 years, or both. 10 (b) A subsequent violation with a total quantity of less than two 11 cartons of cigarettes shall be punishable by a fine of five thousand 12 dollars or five times the retail value of the cigarettes involved, 13 whichever is greater, or imprisonment not to exceed five years, or both, 14 and shall also result in the revocation by such commissioner of the 15 manufacturer, importer, agent, or dealer license. 16 (c) A first violation with a total quantity of two cartons of ciga- 17 rettes or more shall be punishable by a fine of two thousand dollars or 18 five times the retail value of the cigarettes involved, whichever is 19 greater, or imprisonment not to exceed five years, or both. 20 (d) A subsequent violation with a quantity of two cartons of ciga- 21 rettes or more shall be punishable by a fine of fifty thousand dollars 22 or five times the retail value of the cigarettes involved, whichever is 23 greater, or imprisonment not to exceed five years, or both, and shall 24 also result in the revocation by such commissioner of the manufacturer, 25 importer, agent, or dealer license. 26 For purposes of this subdivision, counterfeit cigarettes include ciga- 27 rettes that have false manufacturing labels or packages of cigarettes 28 bearing counterfeit tax stamps. Any counterfeit cigarettes seized by the 29 commissioner shall be destroyed. 30 § 16. Subdivision (a) of section 1846 of the tax law, as amended by 31 chapter 556 of the laws of 2011, is amended to read as follows: 32 (a) Whenever a police officer designated in section 1.20 of the crimi- 33 nal procedure law or a peace officer designated in subdivision four of 34 section 2.10 of such law, acting pursuant to his or her special duties, 35 shall discover any cigarettes subject to tax provided by article twenty 36 of this chapter or by chapter thirteen of title eleven of the adminis- 37 trative code of the city of New York, and upon which the tax has not 38 been paid or the stamps not affixed as required by such article or such 39 chapter thirteen, or any cigarettes otherwise being possessed or held in 40 violation of article twenty of this chapter, they are hereby authorized 41 and empowered forthwith to seize and take possession of such cigarettes, 42 together with any vending machine or receptacle in which they are held 43 for sale. Such cigarettes, vending machine or receptacle seized by a 44 police officer or such peace officer shall be turned over to the commis- 45 sioner. Such seized cigarettes, vending machine or receptacle, not 46 including money contained in such vending machine or receptacle, shall 47 be forfeited to the state. The commissioner may, within a reasonable 48 time thereafter, upon publication of a notice to such effect for at 49 least five successive days, before the day of sale, in a newspaper 50 published or circulated in the county where the seizure was made, sell 51 such forfeited vending machines or receptacles at public sale and pay 52 the proceeds into the state treasury to the credit of the general fund. 53 Notwithstanding any other provision of this section, the commissioner 54 may enter into an agreement with any city of this state which is author- 55 ized to impose a tax similar to that imposed by article twenty of this 56 chapter to provide for the disposition between the state and any suchA. 3431 16 1 city of the proceeds from any such sale. All cigarettes forfeited to 2 the state shall be destroyed or used for law enforcement purposes, 3 except that cigarettes that violate, or are suspected of violating, 4 federal trademark laws or import laws shall not be used for law enforce- 5 ment purposes. If the commissioner determines the cigarettes may not be 6 used for law enforcement purposes, the commissioner must, within a 7 reasonable time after the forfeiture of such cigarettes, upon publica- 8 tion in the state registry, destroy such forfeited cigarettes. The 9 commissioner may, prior to any destruction of cigarettes, permit the 10 true holder of the trademark rights in the cigarettes to inspect such 11 forfeited cigarettes in order to assist in any investigation regarding 12 such cigarettes. 13 § 17. Section 1814 of the tax law, as amended by section 28 of sub- 14 part I of part V-1 of chapter 57 of the laws of 2009, is amended to read 15 as follows: 16 § 1814. Cigarette and tobacco products tax.--(a) Any person who will- 17 fully attempts in any manner to evade or defeat the taxes imposed by 18 article twenty of this chapter or payment thereof on (i) ten thousand 19 cigarettes or more (ii) twenty-two thousand cigars or more, or (iii) 20 four hundred forty pounds of tobacco or more or has previously been 21 convicted two or more times of a violation of paragraph [one] (i) of 22 this subdivision shall be guilty of a class [E] D felony. 23 (b) Any person, other than an agent licensed by the commissioner, who 24 possesses or transports for the purpose of sale any unstamped or unlaw- 25 fully stamped packages of cigarettes subject to tax imposed by section 26 four hundred seventy-one of this chapter, or who sells or offers for 27 sale unstamped or unlawfully stamped packages of cigarettes in violation 28 of the provisions of article twenty of this chapter shall be guilty of a 29 [misdemeanor] class E felony. Any person who violates the provisions of 30 this subdivision after having previously been convicted of a violation 31 of this subdivision within the preceding five years shall be guilty of a 32 class [E] D felony. 33 (c) (1) Any person, other than an agent licensed by the commissioner, 34 who willfully possesses or transports for the purpose of sale ten thou- 35 sand or more cigarettes subject to the tax imposed by section four 36 hundred seventy-one of this chapter in any unstamped or unlawfully 37 stamped packages or who willfully sells or offers for sale ten thousand 38 or more cigarettes in any unstamped or unlawfully stamped packages in 39 violation of article twenty of this chapter shall be guilty of a class 40 [E] D felony. 41 (2) Any person, other than an agent licensed by the commissioner, who 42 willfully possesses or transports for the purpose of sale thirty thou- 43 sand or more cigarettes subject to the tax imposed by section four 44 hundred seventy-one of this chapter in any unstamped or unlawfully 45 stamped packages or who willfully sells or offers for sale thirty thou- 46 sand or more cigarettes in any unstamped or unlawfully stamped packages 47 in violation of article twenty of this chapter shall be guilty of a 48 class [D] C felony. 49 (d) For the purposes of this section, the possession or transportation 50 within this state by any person, other than an agent, at any one time of 51 five thousand or more cigarettes in unstamped or unlawfully stamped 52 packages shall be presumptive evidence that such cigarettes are 53 possessed or transported for the purpose of sale and are subject to the 54 tax imposed by section four hundred seventy-one of this chapter. With 55 respect to such possession or transportation any provisions of article 56 twenty of this chapter providing for a time period during which a useA. 3431 17 1 tax imposed by such article may be paid on unstamped cigarettes or 2 unlawfully or improperly stamped cigarettes or during which such ciga- 3 rettes may be returned to an agent shall not apply. The possession with- 4 in this state of more than four hundred cigarettes in unstamped or 5 unlawfully stamped packages by any person other than an agent at any one 6 time shall be presumptive evidence that such cigarettes are subject to 7 tax as provided by article twenty of this chapter. 8 (e) Nothing in this section shall apply to common or contract carriers 9 or warehousemen while engaged in lawfully transporting [or storing] 10 tobacco products or unstamped packages of cigarettes as merchandise 11 through this state to another location under a proper bill of lading or 12 freight bill, or [lawfully transporting or] storing tobacco products or 13 unstamped cigarettes on behalf of a licensed agent, nor to any employee 14 of such carrier or warehouseman acting within the scope of his or her 15 employment, nor to public officers or employees in the performance of 16 their official duties requiring possession or control of unstamped or 17 unlawfully stamped packages of cigarettes or possession or control of 18 tobacco products, nor to temporary incidental possession by employees or 19 agents of persons lawfully entitled to possession, nor to persons whose 20 possession is for the purpose of aiding police officers in performing 21 their duties. 22 (f) Any willful act or omission, other than those described in section 23 eighteen hundred one of this article or subdivision (a), (b), (c), (d), 24 (e), (g), (h) or (i) of this section, by any person which constitutes a 25 violation of any provision of article twenty of this chapter shall 26 constitute a [misdemeanor] class E felony. 27 (g) Any person who falsely or fraudulently makes, alters or counter- 28 feits any stamp prescribed by the [tax commission] commissioner under 29 the provisions of article twenty of this chapter, or causes or procures 30 to be falsely or fraudulently made, altered or counterfeited any such 31 stamp, or knowingly and willfully utters, purchases, passes or tenders 32 as true any such false, altered or counterfeited stamp, or knowingly and 33 willfully possesses any cigarettes in packages bearing any such false, 34 altered or counterfeited stamp, and any person who knowingly and will- 35 fully makes, causes to be made, purchases or receives any device for 36 forging or counterfeiting any stamp, prescribed by the [tax commission] 37 commissioner under the provisions of article twenty of this chapter, or 38 who knowingly and willfully possesses any such device, shall be guilty 39 of a class [E] D felony. For the purposes of this subdivision, the words 40 "stamp prescribed by the [tax commission] commissioner" shall include a 41 stamp, impression or imprint made by a metering machine, the design of 42 which has been approved by such [commission] commissioner. 43 (h) (1) Any dealer, other than a distributor appointed by the commis- 44 sioner [of taxation and finance] under article twenty of this chapter, 45 who shall knowingly transport or have in his or her custody, possession 46 or under his or her control more than ten pounds of tobacco or more than 47 five hundred cigars upon which the taxes imposed by article twenty of 48 this chapter have not been assumed or paid by a distributor appointed by 49 the commissioner of taxation and finance under article twenty of this 50 chapter, or other person treated as a distributor pursuant to section 51 four hundred seventy-one-d of this chapter, shall be guilty of a misde- 52 meanor punishable by a fine of not more than five thousand dollars or by 53 a term of imprisonment not to exceed thirty days. 54 (2) Any person, other than a dealer or a distributor appointed by the 55 commissioner under article twenty of this chapter, who shall knowingly 56 transport or have in his or her custody, possession or under his or herA. 3431 18 1 control more than fifteen pounds of tobacco or more than seven hundred 2 fifty cigars upon which the taxes imposed by article twenty of this 3 chapter have not been assumed or paid by a distributor appointed by the 4 commissioner under article twenty of this chapter, or other person 5 treated as a distributor pursuant to section four hundred seventy-one-d 6 of this chapter shall be guilty of a misdemeanor punishable by a fine of 7 not more than five thousand dollars or by a term of imprisonment not to 8 exceed thirty days. 9 (3) Any person, other than a distributor appointed by the commissioner 10 under article twenty of this chapter, who shall knowingly transport or 11 have in his or her custody, possession or under his or her control twen- 12 ty-five hundred or more cigars or fifty or more pounds of tobacco upon 13 which the taxes imposed by article twenty of this chapter have not been 14 assumed or paid by a distributor appointed by the commissioner under 15 article twenty of this chapter, or other person treated as a distributor 16 pursuant to section four hundred seventy-one-d of this chapter shall be 17 guilty of a misdemeanor. Provided further, that any person who has twice 18 been convicted under this subdivision shall be guilty of a class E felo- 19 ny for any subsequent violation of this section, regardless of the 20 amount of tobacco products involved in such violation. 21 (4) For purposes of this subdivision, such person shall knowingly 22 transport or have in his or her custody, possession or under his or her 23 control tobacco or cigars on which such taxes have not been assumed or 24 paid by a distributor appointed by the commissioner where such person 25 has knowledge of the requirement of the tax on tobacco products and, 26 where to his or her knowledge, such taxes have not been assumed or paid 27 on such tobacco products by a distributor appointed by the commissioner 28 [of taxation and finance]. 29 (i) Any person who falsely or fraudulently makes, alters or counter- 30 feits a registration certificate or sticker required under the 31 provisions of section four hundred eighty-a of this chapter, or causes 32 or procures to be falsely or fraudulently made, altered or counterfeited 33 any such registration certificate or sticker, or knowingly and willfully 34 utters, purchases, passes or tenders as true any such false, altered or 35 counterfeited registration certificate or sticker, and any person who 36 knowingly and willfully makes, causes to be made, purchases or receives 37 any device for forging or counterfeiting any registration certificate or 38 sticker required under the provisions of such section, or who knowingly 39 and willfully possesses any such device, shall be guilty of a class [B40misdemeanor] E felony. 41 § 18. Severability. If any provision of this act or the application of 42 any provision of this act to any person or circumstance is held to be 43 invalid, the remainder of this act and the application of the provisions 44 of this act to any other person or circumstance shall not be affected 45 thereby and shall continue to be enforced to the fullest extent possi- 46 ble. 47 § 19. This act shall take effect on the ninetieth day after it shall 48 have become a law.
