Bill Text: NY A04913 | 2013-2014 | General Assembly | Introduced
Bill Title: Relates to the use of an advanced system for securing tobacco taxes; requires exclusive use of encrypted counterfeit-resistant cigarette tax stamps to provide a commission to agents for the purpose of leasing or the purchase of machinery and a sell-through provision for retailers.
Spectrum: Moderate Partisan Bill (Democrat 7-2)
Status: (Introduced - Dead) 2014-01-15 - enacting clause stricken [A04913 Detail]
Download: New_York-2013-A04913-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
4913
2013-2014 Regular Sessions
I N A S S E M B L Y
February 13, 2013
___________
Introduced by M. of A. GABRYSZAK, CYMBROWITZ, BENEDETTO, CASTRO --
Multi-Sponsored by -- M. of A. AUBRY, MAGEE, McDONOUGH, McKEVITT,
PEOPLES-STOKES, SCARBOROUGH -- read once and referred to the Committee
on Ways and Means
AN ACT to amend the tax law, in relation to requiring the exclusive use
of encrypted counterfeit-resistant cigarette tax stamps to provide a
commission to agents for the purpose of leasing or the purchase of
machinery and a sell-through provision for retailers
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. The tax law is amended by adding a new section 472-a to
2 read as follows:
3 S 472-A. TOBACCO TAX SECURITY. 1. PURSUANT TO THE POWERS VESTED IN THE
4 COMMISSIONER UNDER SECTION FOUR HUNDRED SEVENTY-TWO OF THIS ARTICLE, THE
5 COMMISSIONER SHALL INCORPORATE A SYSTEM FOR SECURING TOBACCO TAXES DUE
6 TO THE STATE. SUCH A SYSTEM SHALL BE COMPRISED, AT A MINIMUM, OF THE
7 FOLLOWING:
8 (A) THE USE OF ENCRYPTED TAX STAMPS BY STAMPING AGENTS LICENSED PURSU-
9 ANT TO SECTION FOUR HUNDRED SEVENTY-TWO OF THIS ARTICLE. SUCH STAMPS
10 SHALL BE ENCRYPTED TO IDENTIFY, AT A MINIMUM:
11 (I) THE NAME AND ADDRESS OF THE LICENSED STAMPING AGENT AFFIXING THE
12 STAMP;
13 (II) THE DATE THE STAMP WAS AFFIXED TO THE PRODUCT; AND
14 (III) THE DENOMINATED VALUE OF THE STAMP OR METER IMPRESSION.
15 (B) THE SECURE MANAGEMENT OF ANY DATA REQUIRED UNDER PARAGRAPH (A) OF
16 THIS SUBDIVISION AND OTHER DATA AS MAY BE REQUIRED BY THE COMMISSIONER;
17 (C) THE ENFORCEMENT OF SECTION FOUR HUNDRED SEVENTY-TWO OF THIS ARTI-
18 CLE, INCLUDING SUCH DEVICES AS MAY BE USED BY THE DEPARTMENT AND OTHER
19 STATE EMPLOYEES AUTHORIZED BY THE COMMISSIONER.
20 2. SUCH ENCRYPTED TAX STAMPS SHALL:
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05358-01-3
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1 (A) BE PRODUCED IN A PROVEN SECURE FACILITY CERTIFIED IN ACCORDANCE
2 WITH THE SECURITY ASSISTANCE STANDARDS ESTABLISHED IN TWO THOUSAND FIVE
3 BY THE AMERICAN NATIONAL STANDARDS INSTITUTE AND THE NORTH AMERICAN
4 SECURITY PRODUCTS ORGANIZATION;
5 (B) INCORPORATE A MINIMUM OF FOUR LAYERS OF OVERT, SEMI-COVERT AND
6 COVERT DATA;
7 (C) BE APPLIED BY MACHINES WHEREUPON THE ENCRYPTED DATA SHALL BE
8 INSTANTANEOUSLY CAPTURED AND STORED BY AND FOR THE DEPARTMENT;
9 (D) BE READABLE AND TRACEABLE FROM THE POINT OF STAMP PRODUCTION TO
10 SUCH POINT AS DEEMED APPROPRIATE BY THE COMMISSIONER; AND
11 (E) BE CAPABLE OF BEING READ BY A SCANNING OR SIMILAR DEVICE THAT CAN
12 BE UTILIZED BY ENFORCEMENT AGENTS OF THE STATE AND OTHERS DEEMED APPRO-
13 PRIATE BY THE COMMISSIONER.
14 S 2. The department of taxation and finance shall issue a request for
15 proposal for the purpose of providing the system described in section
16 472-a of the tax law, as added by section one of this act, within 90
17 days of the effective date of this act. Bids from qualified vendors
18 shall be received by the department of taxation and finance no later
19 than 60 days following the issuance of the request for proposal. Any
20 contract issued pursuant to this section shall be issued within 90 days
21 following receipt of bids and installation of such system completed by
22 the successful bidder within 180 days of the issuance of such contract.
23 S 3. Subdivision 1 of section 472 of the tax law, as amended by chap-
24 ter 629 of the laws of 1996 and as further amended by section 104 of
25 part A of chapter 62 of the laws of 2011, is amended to read as follows:
26 1. The commissioner shall prescribe, prepare and furnish stamps of
27 such denominations and quantities as may be necessary for the payment of
28 the tax on cigarettes imposed by this article, and may from time to time
29 and as often as he deems advisable provide for the issuance and exclu-
30 sive use of stamps of a new design and forbid the use of stamps of any
31 other design, in the manner and with the effect provided in section two
32 hundred seventy-four of this chapter. The commissioner shall make
33 provisions for the sale of such stamps at such places and at such times
34 as he may deem necessary and may license agents for such purpose. The
35 commissioner may license dealers in cigarettes, who maintain separate
36 warehousing facilities for the purpose of receiving and distributing
37 cigarettes and conducting their business, who have received commitments
38 from at least two [cigarette] manufacturers whose aggregate market share
39 is at least forty percent of the New York state [cigarette] market, and
40 importers, exporters and manufacturers of cigarettes, and other persons
41 within or without the state as agents to buy or affix stamps to be used
42 in paying the tax herein imposed, but an agent shall at all times have
43 the right to appoint the person in his employ who is to affix the stamps
44 to any cigarettes under the agent's control. The fee for filing such
45 application for an agent's license shall be one thousand five hundred
46 dollars, unless such fee has been paid during the preceding twelve
47 months, in which case, the fee for a new license shall be one thousand
48 dollars. All of the provisions of section four hundred eighty OF THIS
49 ARTICLE relating to wholesale dealers' licenses, including the procedure
50 for suspension, revocation, refusal to license and for hearings, except
51 for paragraphs (c) and (g) of subdivision one of such section, shall be
52 applicable to agents' licenses applied for or granted pursuant to this
53 section, as if such provisions had been set forth in full in this subdi-
54 vision and had expressly referred to the applicant for, or the holder
55 of, an agent's license. Whenever the commissioner shall sell and deliver
56 to any such agent any such stamps, such agent shall be entitled to
A. 4913 3
1 receive as compensation for his services and expenses as such agent in
2 selling or affixing such stamps, and to retain out of the moneys to be
3 paid by him for such stamps, a commission on the par value thereof. The
4 commissioner is hereby authorized to prescribe a schedule of commis-
5 sions, not exceeding five per centum, allowable to such agent for buying
6 and affixing such stamps. Such schedule shall be uniform with respect to
7 the different types of stamps used, and may be on a graduated scale with
8 respect to the number of stamps purchased, PROVIDED HOWEVER, SUCH AGENTS
9 SHALL BE ENTITLED TO AN ADDED COMMISSION IN EXCESS OF THE FIVE PER
10 CENTUM TO BE DETERMINED BY THE COMMISSIONER TO MITIGATE THE COSTS TO
11 SUCH AGENTS IN RELATION TO THE LEASE OR PURCHASE OF THE MACHINERY AND/OR
12 EQUIPMENT NECESSARY TO APPLY OR AFFIX SUCH STAMPS AS REQUIRED IN SECTION
13 FOUR HUNDRED SEVENTY-TWO-A OF THIS ARTICLE. The commissioner may, in
14 his discretion, permit an agent to pay for such stamps within thirty
15 days after the date of purchase and may require any such agent to file
16 with the department [of taxation and finance] a bond issued by a surety
17 company approved by the superintendent of financial services as to
18 solvency and responsibility and authorized to transact business in the
19 state or other security acceptable to the commissioner, in such amount
20 as the commissioner may fix, to secure the payment of any sums due from
21 such agent pursuant to this article. If securities are deposited as
22 security under this subdivision, such securities shall be kept in the
23 custody of the commissioner and may be sold by the commissioner if it
24 becomes necessary so to do in order to recover any sums due from such
25 agent pursuant to this article, but no such sale shall be had until
26 after such agent shall have had opportunity to litigate the validity of
27 any tax if it elects so to do. Upon any such sale, the surplus, if any,
28 above the sums due under this article shall be returned to such agent.
29 S 4. The department of taxation and finance shall, following the
30 implementation period and annually thereafter, report to the legislature
31 and to the governor on the effectiveness of the provisions of this act.
32 S 5. This act shall take effect immediately, provided, however, that
33 section two of this act shall take effect on the one hundred eightieth
34 day following the awarding of such contract pursuant to this act;
35 provided further that any product in the possession of a cigarette
36 retail dealer on the effective date of this act and stamped to the
37 commissioner of taxation and finance's satisfaction may continue to be
38 offered for sale and sold to cigarette purchasers.
