N.Y. Tax Law § 1103: Prepayment of sales tax on cigarettes

§ 1103. Prepayment of sales tax on cigarettes. (a)(1) Every cigarette

agent shall pay, as a prepayment on account of the taxes imposed by this

article and pursuant to the authority of article twenty-nine of this

chapter, a tax on cigarettes possessed for sale or use in this state and

to which an agent is required to affix cigarette tax stamps under

article twenty of this chapter, at the time that the agent is required

to purchase and affix such stamps (or as otherwise prescribed by the

commissioner pursuant to such article twenty) and the provisions of such

article twenty in relation to the use of stamps to evidence payment of

the tax imposed by such article twenty shall be applicable to the

prepayment imposed by this section, except no tax shall be required to

be prepaid on cigarettes sold under circumstances that this state is

without power to impose such prepayment or sold to the United States or

sold to or by a voluntary unincorporated organization of the armed

forces of the United States operating a place for the sale of goods

pursuant to regulations promulgated by the appropriate executive agency

of the United States, to the extent provided in such regulations and

written policy statements of such an agency applicable to such sales.

(2) The tax imposed by this section shall be paid at the same time and

in the same manner as the tax imposed by such article twenty with

respect to cigarettes. The commissioner may, in the commissioner's

discretion, permit an agent to pay the tax imposed under this section at

the same time that the agent pays for cigarette tax stamps under article

twenty of this chapter and may require any such agent to file with the

department a bond issued by a surety company approved by the

superintendent of financial services as to solvency and responsibility

and authorized to transact business in the state or other security

acceptable to the commissioner, in such amount as the commissioner may

fix, to secure the payment of any sums due from such agent pursuant to

this section. If securities are deposited as security under this

subdivision, such securities shall be kept in the custody of the

commissioner and may be sold by the commissioner if it becomes necessary

to do so in order to recover any sums due from such agent pursuant to

this section, but no such sale shall be had until after such agent shall

have had an opportunity to litigate the validity of any prepayment of

tax if it elects to do so. Upon any such sale, the surplus, if any,

above the sums due under this section shall be returned to such agent.

Any bond or security required under this section may be jointly

administered with the bond or security required of the agent under

section four hundred seventy-two of this chapter and in such event shall

secure payment of the sums due under such article twenty and under this

section. The tax imposed by this section and the portion of the cost of

any stamp which evidences payment of the tax imposed by this section and

which is attributable to the tax imposed by this section shall not be

included in the term "basic cost of cigarettes" as such term is defined

in section four hundred eighty-three of this chapter.

(3) Every person other than an agent shall prepay the tax imposed by

this section at the same time and in the same manner as the use tax

imposed by section four hundred seventy-one-a of this chapter. The

commissioner may require any compensating use tax imposed by section

eleven hundred ten and pursuant to the authority of article twenty-nine

of this chapter to be paid at such time after allowing for the credit

provided by subdivision (b) of section eleven hundred twenty-one of this

article.

(4) The amount of the prepayment for cigarettes imposed by this

section shall be computed pursuant to the provisions of subdivision (j)

of section eleven hundred eleven of this article.

(b) Except as otherwise provided in this section, the taxes required

to be prepaid pursuant to this section shall be administered and

collected in a like manner as the taxes imposed by sections eleven

hundred five and eleven hundred ten of this article. All the provisions

of this article relating to or applicable to the administration,

collection and disposition of the taxes imposed by such sections shall

apply to the tax required to be prepaid under this section so far as

such provisions can be made applicable to such prepayments of tax with

such limitations as set forth in this article and such modifications as

may be necessary in order to adapt such language to the tax so imposed;

provided, however, that the provisions of paragraph one of subdivision

(c) of section eleven hundred thirty-seven of this article shall not be

applicable to such tax required to be prepaid under this section. Such

provisions shall apply with the same force and effect as if the language

of those provisions had been set forth in full in this section except to

the extent that any provision is either inconsistent with a provision of

this section or is not relevant to the tax required to be prepaid by

this section. For purposes of this section, any reference in this

article to the tax or taxes imposed by this article shall be deemed to

refer to the tax required to be prepaid pursuant to this section unless

a different meaning is clearly required.

(c) Nothing in this article shall be construed to require the payment

of the tax required to be prepaid pursuant to this section more than

once upon cigarettes possessed for sale or used within the state. When

the prepaid tax imposed pursuant to this section is paid, it shall have

been so paid on account of the taxes imposed by this article and

pursuant to the authority of article twenty-nine of this chapter with

respect to the retail sale or the use of cigarettes. Nothing in this

section shall modify or affect the taxes imposed by sections eleven

hundred five and eleven hundred ten of this article as applied to

receipts from the sale, or to the use, of such cigarettes.

(d) Deposit and disposition of revenue. (1) Consistent with sections

eleven hundred forty-eight of this article and twelve hundred sixty-one

of this chapter, the taxes required to be prepaid pursuant to this

section and interest and penalties thereon received by the commissioner,

after deducting the amount which the commissioner shall determine to be

necessary for reasonable costs of the commissioner in administering,

collecting, and distributing such taxes, shall be deposited daily with

such responsible banks, banking houses or trust companies, as may be

designated by the comptroller, to the credit of the comptroller. Of the

total revenue collected or received under this section, the comptroller

shall retain in the comptroller's hands such amount as the commissioner

may determine to be necessary for refunds under this article and

pursuant to the authority of article twenty-nine of this chapter.

(2) On or before the twelfth day of each month, after reserving such

amount for such refunds and such costs, the commissioner shall determine

the amount of all revenues so received during the prior month as a

result of the taxes, interest and penalties so imposed and, in addition,

on or before the last day of June and December the commissioner shall

determine in like manner the amount of such moneys received during and

including the first twenty-five days of said months. The commissioner

shall determine the proportion of revenues attributable to receipts for

the period for which the determination is made pursuant to the preceding

sentence from taxes on sales and uses of property and services and rent

and amusement charges imposed by this article and pursuant to the

authority of article twenty-nine of this chapter and administered by the

commissioner which is payable to each jurisdiction determined without

regard to this section. The amount of revenues so determined pursuant to

this section shall be deposited and distributed by the comptroller in

accordance with the same percentage amount to which a jurisdiction is

entitled determined without regard to this section. Where the amount so

determined in any distribution from such taxes (other than the tax

imposed by this section) is more or less than the amount due, the amount

of the overpayment or underpayment shall be determined as soon after the

discovery of the overpayment or underpayment as is reasonably possible

and subsequent determinations shall be adjusted by subtracting the

amount of any such overpayment from or by adding the amount of any such

underpayment to such number of subsequent payments as the comptroller

and the commissioner shall consider reasonable in view of the amount of

the overpayment or underpayment and all other pertinent facts and

circumstances. The commissioner shall not be liable for any overestimate

or underestimate of the amount of the distribution. Nor shall the

commissioner be liable for any inaccuracy in any determination with

respect to the amount of the distribution or any required adjustment

with respect to the distribution, but the commissioner shall as soon as

practicable after discovery of any error adjust the next determination

under this section to reflect any such error.