N.Y. Tax Law § 480: License

§ 480. License. 1. General. (a) On and after July first, nineteen

hundred thirty-nine no person shall be a wholesale dealer unless he has

been granted and publicly displays in his place of business a license

from the department. Applications for licenses shall be made on forms

prescribed by the commissioner.

(b) Applications shall be accompanied by proof of the applicant's

financial responsibility, including, but not limited to, satisfactory

proof of a minimum net worth of twenty-five thousand dollars if the

applicant is an individual, or net worth in the capitalization of the

business if the applicant is not an individual equal to a minimum of

twenty-five thousand dollars.

(c) Each applicant shall 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, in the face amount of ten thousand dollars, to secure payment

of any sums due for any violation of article twenty or article twenty-A

of this chapter, or the regulations of the commissioner thereunder.

(d) Each applicant shall file satisfactory proof that it will maintain

a secure separate warehousing facility for the purpose of receiving and

distributing cigarettes or tobacco products and conducting its wholesale

business. Such proof shall consist of a copy of a deed, or a copy of an

executed lease for a minimum period of two years, to a separate, secure

warehouse. If the applicant carries on another business in conjunction

with the warehouse facility, the other business shall also be

identified.

(e) Each applicant shall file satisfactory proof that it will provide

disability and workers' compensation insurance for its employees.

(f) Each applicant shall submit proof of United States citizenship or

eligibility to obtain employment within the United States if not a

citizen. If the applicant is not an individual, such proof shall be

submitted with respect to each controlling person of the applicant.

(g) The fee for the filing of an application for a license shall be

fifteen 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. Each application shall be accompanied by a

certified check for the required application fee.

(h) Except as provided in subdivision four of this section, a license

shall continue in effect until revoked or suspended for cause or

surrendered.

(i) A license shall not be assignable but an applicant who is

purchasing the business of a licensee shall file a copy of the contract

of sale and any related documents with its application.

(j) The commissioner may for cause refuse to issue, or may suspend or

revoke a wholesaler's license, or may forbid a retail dealer to continue

selling cigarettes or tobacco products or may forbid a person required

to be appointed as a distributor of tobacco products who has not been so

appointed from selling cigarettes or tobacco products, after an

opportunity for hearing has been afforded. A violation of any provision

of this article or of any regulation issued under it shall be cause to

forbid a retail dealer to continue selling cigarettes or tobacco

products.

(k) No agent shall sell cigarettes and no distributor shall sell

tobacco products to an unlicensed wholesale dealer, or to a wholesale

dealer whose license has been suspended or revoked, or to a retail

dealer who is not registered under section four hundred eighty-a of this

article, or whose registration has been suspended or revoked, and no

wholesale dealer shall sell cigarettes or tobacco products to a retail

dealer who is not registered under section four hundred eighty-a of this

article, or whose registration has been suspended or revoked, and no

retail dealer shall sell cigarettes or tobacco products unless such

dealer is registered under section four hundred eighty-a of this

article.

(l) Paragraphs (b), (c) and (g) of this subdivision shall not apply to

the filing of an application for a license as a wholesale dealer that is

based solely upon the ownership, operation or maintenance of one or more

cigarette or tobacco products vending machines in, at or upon premises

owned or occupied by another person, or that is based solely upon the

sale of tobacco products for resale, or that is based upon both the

ownership, operation or maintenance of one or more cigarette or tobacco

products vending machines in, at or upon premises owned or occupied by

another person and the sale of tobacco products for resale.

2. Refusal to license. The commissioner of taxation and finance may

refuse to license an applicant where such applicant files an application

under this section and in considering such application the commissioner

ascertains that:

(a) Any tax imposed under this chapter or under any related statute as

defined in section eighteen hundred of this chapter has been finally

determined to be due from such applicant or controlling person and such

tax has not been paid in full,

(b) Such applicant or any controlling person has been convicted of a

crime provided for in this chapter within the preceding five years,

(c) Such applicant or any controlling person was the controlling

person in another wholesale dealer at the time that:

(i) Any tax imposed under this chapter or any related statute as

defined in section eighteen hundred of this chapter was finally

determined to be due from such other wholesale dealer and such tax has

not been paid in full,

(ii) Such other wholesale dealer was convicted of a crime provided for

in this chapter within the preceding five years, or

(iii) The license of such other wholesale dealer was cancelled or

suspended pursuant to this section within the preceding five years,

(d) The license of such applicant has been cancelled or suspended

pursuant to this section within the preceding five years,

(e) Any controlling person of such applicant has committed any of the

acts specified in subdivision three of this section within the preceding

five years, or

(f) Such applicant or any controlling person has been finally

determined to have violated any of the provisions of this article or

article twenty-A of this chapter, or any rule or regulation adopted

pursuant to this article or article twenty-A of this chapter.

3. Cancellation or suspension of license.

(a) Acts of licensee. The license of any wholesale dealer may be

cancelled or suspended by the tax commission upon:

(i) Its failure to file or maintain in full force and effect a bond or

other security when required or when the amount thereof is increased,

(ii) Its failure to comply with any of the provisions of this article

or article twenty-A of this chapter or any rule or regulation adopted

pursuant to this article or article twenty-A of this chapter by the

department or the commissioner, provided, however, that any violation of

section four hundred seventy-three-b of this article shall result in

license cancellation,

(iii) Its knowingly aiding and abetting another person in violating

any of the provisions of this article or article twenty-A of this

chapter or any rule or regulation adopted pursuant to this article or

article twenty-A of this chapter by the department or the commissioner,

provided, however, that any violation of section four hundred

seventy-three-b of this article shall result in license cancellation.

(b) Acts of licensee or controlling person. A license may be cancelled

or suspended if the tax commission determines that a licensee or any

controlling person:

(i) Commits fraud or deceit in his or its operations as a wholesale

dealer or has committed fraud or deceit in procuring his or its license,

(ii) Has been convicted in a court of competent jurisdiction, either

within or without the state, of a felony, bearing on the licensee's

duties and obligations under this chapter,

(iii) Has impersonated any person represented to be a wholesale dealer

under this article but not in fact licensed under this section, or

(iv) Has knowingly aided and abetted the sale of cigarettes or tobacco

products by a person which such licensee or controlling person knows (A)

has not been licensed by the commissioner of taxation and finance and

(B) is a wholesale dealer pursuant to the terms of subdivision eight of

section four hundred seventy of this chapter.

4. If the commissioner of taxation and finance considers it necessary

for the proper administration of the cigarette tax or tobacco products

tax imposed by this article or the cigarette marketing standards

contained in article twenty-A of this chapter he may require every

person under this article who holds a license to file a new application

for a license in such form and at such time as the commissioner may

prescribe and to surrender such license. The commissioner may require

such filing and such surrender not more often than once every three

years. Upon the filing of such application with the proper fee and the

surrender of such license, the commissioner shall issue, within such

time as he may prescribe, a new license to each applicant.

5. Hearing procedure. (a) General. A notice of proposed cancellation

or suspension of a license or refusal to issue a license shall be given

to the wholesale dealer licensed pursuant to this article or to an

applicant applying for such license in the manner prescribed for a

notice of deficiency of tax and all the provisions applicable to a

notice of deficiency under article twenty-seven of this chapter,

including, but not limited to, those provisions authorizing the tax

commission to abate on its own motion, shall apply to a notice issued

pursuant to this subdivision, insofar as such provisions can be made

applicable to a notice authorized by this subdivision, with such

modifications as may be necessary in order to adapt the language of such

provisions to the notice authorized by this subdivision. Such notice of

proposed cancellation or suspension or of proposed refusal to license

must be given to such person within five years from the date of the act

or omission referred to in subdivision two or three of this section,

except that in the case of acts involving falsity or fraud, such notice

may be issued at any time. All of such notices shall contain a statement

advising the person to whom it is issued that the cancellation,

suspension or refusal to license may be challenged through a hearing

process and that the petition for such challenge must be filed with the

tax commission within ninety days after the giving of such notice. Where

a license is cancelled or suspended prior to a hearing, the cancellation

or suspension may be challenged through the hearing process provided the

petition for such challenge is filed within ninety days after the giving

of notice of such cancellation or suspension.

(b) Refusal to license. In the case of a person applying to be

licensed as a wholesale dealer, a notice of proposed refusal to license

shall be issued promptly after application for license is received by

the tax commission. Upon timely application therefor, a hearing shall be

scheduled, and within three months from such application for hearing

(determined with regard to any postponements of any scheduled hearing or

conference or other delay made at the request of the applicant) the tax

commission shall issue a notice of refusal to license or shall license

the applicant. If the tax commission fails to issue a notice of refusal

to license within such three month period (or such period as extended

pursuant to this paragraph), the tax commission shall license the

applicant immediately upon the conclusion of such period so long as the

applicant has filed a bond or other security as required by the tax

commission.

6. For purposes of this section, the term "controlling person" means

any person who is:

(a) An officer, director or partner or, in the case of a limited

liability company, a member or a person having with respect to such

limited liability company authority analogous to that of an officer or

director with respect to a corporation of an applicant for a wholesale

dealer's license or of a licensee under this article, or

(b) A shareholder, directly or indirectly owning more than ten percent

of the number of shares of stock of such applicant or licensee (where

such applicant or licensee is a corporation) entitling the holder

thereof to vote for the election of directors or trustees. For purposes

of this paragraph, where reference is made to ownership, directly or

indirectly, of more than ten percent of the shares of stock of the

applicant or another person entitling the holder thereof to vote for the

election of directors or trustees, in the case of an applicant or

another person which at the relevant time has four or fewer shareholders

holding shares entitling the holders thereof to vote for the election of

directors or trustees, twenty-five percent or more shall be substituted

as the applicable percentage in such references to ownership, directly

or indirectly, of voting stock.