Bill Text: NY S00582 | 2009-2010 | General Assembly | Introduced
Bill Title: Requires the use of encrypted counterfeit-resistant tobacco product tax stamps and markets.
Spectrum: Slight Partisan Bill (Democrat 5-2)
Status: (Introduced - Dead) 2011-01-05 - REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS [S00582 Detail]
Download: New_York-2009-S00582-Introduced.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 582 2011-2012 Regular Sessions I N S E N A T E (PREFILED) January 5, 2011 ___________ Introduced by Sens. KLEIN, DILAN, GOLDEN, HASSELL-THOMPSON, KRUGER, SAVINO -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations AN ACT to amend the tax law, in relation to requiring the use of encrypted counterfeit-resistant cigarette tax stamps or markers 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. PROVISION FOR ENHANCED CIGARETTE AND TOBACCO TAX 4 COLLECTIONS. 1. PURSUANT TO THE POWERS VESTED IN THE COMMISSIONER UNDER 5 THIS ARTICLE TO COLLECT TAXES ON CIGARETTES AND TOBACCO PRODUCTS, THE 6 COMMISSIONER SHALL INCORPORATE AN ENHANCED SYSTEM TO SECURE THE 7 COLLECTION OF SUCH TAXES DUE TO THE STATE. SUCH AN ENHANCED SYSTEM 8 SHALL USE AN ENCRYPTED COUNTERFEIT-RESISTANT TAX STAMP OR OTHER MARKING 9 SYSTEM TO INDICATE THAT THE TAXES ON SUCH CIGARETTE AND TOBACCO PRODUCTS 10 HAVE BEEN PAID. SUCH SYSTEM SHALL BE COMPRISED OF AT LEAST THE FOLLOWING 11 ITEMS: 12 (A) THE USE OF ENCRYPTED TAX STAMPS OR OTHER MARKINGS BY STAMPING 13 AGENTS LICENSED PURSUANT TO SECTION FOUR HUNDRED SEVENTY-TWO OF THIS 14 ARTICLE AND OTHER TAX COLLECTION SYSTEMS OR MARKERS USED BY THE COMMIS- 15 SIONER TO COLLECT CIGARETTE AND TOBACCO PRODUCT TAXES. SUCH STAMPS OR 16 MARKERS SHALL BE ENCRYPTED TO IDENTIFY, AT A MINIMUM: 17 (I) THE NAME AND ADDRESS OF THE LICENSED STAMPING AGENT AFFIXING THE 18 STAMP OR OTHER MARKER; 19 (II) THE DATE SUCH STAMP OR OTHER MARKER WAS AFFIXED TO THE PRODUCT; 20 AND 21 (III) THE DENOMINATED VALUE OF THE STAMP OR METER IMPRESSION. 22 (B) THE SECURE MANAGEMENT OF ANY DATA REQUIRED UNDER PARAGRAPH (A) OF 23 THIS SUBDIVISION AND OTHER DATA AS MAY BE REQUIRED BY THE COMMISSIONER; EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD04442-02-1 S. 582 2 1 (C) THE ENFORCEMENT OF SECTION FOUR HUNDRED SEVENTY-TWO OF THIS ARTI- 2 CLE, INCLUDING SUCH DEVICES AS MAY BE USED BY THE DEPARTMENT AND OTHER 3 STATE EMPLOYEES AUTHORIZED BY THE COMMISSIONER. 4 2. SUCH ENCRYPTED TAX STAMPS OR OTHER MARKERS SHALL: 5 (A) BE PRODUCED IN A PROVEN SECURE FACILITY AS CERTIFIED BY THE 6 COMMISSIONER; 7 (B) INCORPORATE A MINIMUM OF FOUR LAYERS OF OVERT, SEMI-COVERT AND 8 COVERT DATA; 9 (C) BE APPLIED BY MACHINES OR OTHER MEANS WHEREUPON THE ENCRYPTED DATA 10 SHALL BE INSTANTANEOUSLY CAPTURED AND STORED BY AND FOR THE COMMISSION- 11 ER; 12 (D) BE READABLE AND TRACEABLE FROM THE POINT OF STAMP PRODUCTION TO 13 SUCH POINT AS DEEMED APPROPRIATE BY THE COMMISSIONER; AND 14 (E) BE CAPABLE OF BEING READ BY A SCANNING OR SIMILAR DEVICE THAT CAN 15 BE UTILIZED BY ENFORCEMENT AGENTS OF THE STATE AND OTHERS DEEMED APPRO- 16 PRIATE BY THE COMMISSIONER. 17 3. SUCH SYSTEM SHALL BE PERIODICALLY UPDATED TO FURTHER MINIMIZE THE 18 EVASION OF THE COLLECTION OF CIGARETTE AND TOBACCO TAXES DUE TO THE 19 STATE. 20 4. EVERY WHOLESALE DEALER THAT IS A LICENSED AGENT TO BUY AND AFFIX 21 STAMPS TO BE USED IN PAYING THE TAX IMPOSED UNDER THIS ARTICLE SHALL BE 22 REQUIRED TO BEAR THE INITIAL COST AND MAINTENANCE NECESSARY FOR THE 23 DEPARTMENT TO IMPLEMENT SUCH ENHANCED TAX COLLECTION SYSTEM. 24 S 2. The department of taxation and finance shall issue a request for 25 proposals for the purpose of providing the system described in section 26 472-a of the tax law, as added by section one of this act. Bids from 27 qualified vendors shall be received by the department of taxation and 28 finance no later than 60 days following the issuance of the request for 29 proposal. Any contract issued pursuant to this section shall be issued 30 within 90 days following receipt of bids and installation of such system 31 completed by the successful bidder within 180 days of the issuance of 32 such contract. 33 S 3. This act shall take effect immediately, provided, however, that 34 section two of this act shall take effect on the one hundred eightieth 35 day after it shall have become a law; provided further that any product 36 in the possession of a cigarette retail dealer on the effective date of 37 this act and stamped to the commissioner of taxation and finance's 38 satisfaction may continue to be offered for sale and sold to cigarette 39 purchasers.