N.Y. Tax Law § 472: Preparation and sale of stamps; commissions; distributors

§ 472. Preparation and sale of stamps; commissions; distributors. 1.

The commissioner shall prescribe, prepare and furnish stamps of such

denominations and quantities as may be necessary for the payment of the

tax on cigarettes imposed by this article, and may from time to time and

as often as he deems advisable provide for the issuance and exclusive

use of stamps of a new design and forbid the use of stamps of any other

design, in the manner and with the effect provided in section two

hundred seventy-four of this chapter. The commissioner shall make

provisions for the sale of such stamps at such places and at such times

as he may deem necessary and may license agents for such purpose. The

commissioner may license dealers in cigarettes, who maintain separate

warehousing facilities for the purpose of receiving and distributing

cigarettes and conducting their business, who have received commitments

from at least two cigarette manufacturers whose aggregate market share

is at least forty percent of the New York state cigarette market, and

importers, exporters and manufacturers of cigarettes, and other persons

within or without the state as agents to buy or affix stamps to be used

in paying the tax herein imposed, but an agent shall at all times have

the right to appoint the person in his employ who is to affix the stamps

to any cigarettes under the agent's control. The fee for filing such

application for an agent's license shall be one thousand five hundred

dollars, unless such fee has been paid during the preceding twelve

months, in which case, the fee for a new license shall be one thousand

dollars. All of the provisions of section four hundred eighty relating

to wholesale dealers' licenses, including the procedure for suspension,

revocation, refusal to license and for hearings, except for paragraphs

(c) and (g) of subdivision one of such section, shall be applicable to

agents' licenses applied for or granted pursuant to this section, as if

such provisions had been set forth in full in this subdivision and had

expressly referred to the applicant for, or the holder of, an agent's

license. Whenever the commissioner shall sell and deliver to any such

agent any such stamps, such agent shall be entitled to receive as

compensation for his services and expenses as such agent in selling or

affixing such stamps, and to retain out of the moneys to be paid by him

for such stamps, a commission on the par value thereof. The commissioner

is hereby authorized to prescribe a schedule of commissions, not

exceeding five per centum, allowable to such agent for buying and

affixing such stamps. Such schedule shall be uniform with respect to the

different types of stamps used, and may be on a graduated scale with

respect to the number of stamps purchased. The commissioner may, in his

discretion, permit an agent to pay for such stamps within thirty days

after the date of purchase and may require any such agent to file with

the department of taxation and finance 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 article. 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 so to do in order to recover any sums due from such agent

pursuant to this article, but no such sale shall be had until after such

agent shall have had opportunity to litigate the validity of any tax if

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

sums due under this article shall be returned to such agent.

2. A manufacturer or agent who intends to sell within the state

packages of cigarettes containing more than twenty cigarettes must

notify the tax commission, in writing, of such intention one hundred

twenty days prior to the time such packages will be sold within the

state, except that such tax commission shall waive such requirement if

it has already prescribed, prepared and furnished, or is in a position

to prescribe, prepare and furnish in a timely manner, stamps of such

denomination and quantities as may be necessary for the payment of the

tax imposed by this article on cigarettes in such package; provided,

however, that a notice provided pursuant to this subdivision within

fifteen days of the effective date of this subdivision shall be deemed

to have been provided on the effective date of this subdivision.

3. The commissioner of taxation and finance may appoint dealers in

tobacco products, manufacturers of tobacco products and other persons

within or without the state as distributors and may authorize them to

make returns and to pay the tax on tobacco products sold, shipped or

delivered by them to any person in the state. The commissioner may, in

his discretion, require the deposit of 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 this state, or

other security acceptable to the commissioner in an amount and form

satisfactory to him as a condition of appointing any such person as a

distributor. If securities are deposited as security under this

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

commissioner of taxation and finance and may be sold by the commissioner

if it becomes necessary so to do in order to recover any sums due from

such distributor pursuant to this article, but no such sale shall be had

until after such distributor shall have had an opportunity to litigate

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

surplus, if any, above the sums due under this article shall be returned

to such distributor.