N.Y. Tax Law § 481: Penalties and interest

§ 481. Penalties and interest. 1. (a)(i)(A) An agent or distributor or

other person treated as a distributor pursuant to section four hundred

seventy-one-d who or which fails to file a return or to pay any tax

within the time required by or pursuant to this article (determined with

regard to any extension of time for filing or paying) shall be subject

to a penalty of ten per centum of the amount of tax determined to be due

as provided in this article plus one per centum of such amount for each

month or fraction thereof during which such failure continues after the

expiration of the first month after such return was required to be filed

or such tax became due, not exceeding thirty per centum in the

aggregate.

(B) If a tax on cigarettes or on tobacco products under this article

is not paid when due by any other person, the person liable for the

payment of such tax shall be subject to a penalty of fifty per centum of

the amount of such tax determined to be due as provided in this article

plus one per centum of such amount for each month or fraction thereof

during which such failure to pay continues after the expiration of the

first month after such tax became due.

(C) In the case of a failure to file such return within sixty days of

the date prescribed for filing of such return by or pursuant to this

article (determined with regard to any extension of time for filing),

the penalty imposed by this paragraph shall not be less than the lesser

of one hundred dollars or one hundred per centum of the amount required

to be shown as tax on such return. For the purpose of the preceding

sentence, the amount of tax required to be shown on the return shall be

reduced by the amount of any part of the tax which is paid on or before

the date prescribed for payment of the tax and by the amount of any

credit against the tax which may be claimed upon the return.

(ii) If any amount of tax is not paid on or before the last date

prescribed in this article for payment, interest on such amount at the

underpayment rate set by the commissioner of taxation and finance

pursuant to subdivision twenty-sixth of section one hundred seventy-one

of this chapter shall be paid for the period from such last date to the

date paid, whether or not any extension of time for payment was granted.

Interest under this subparagraph shall not be paid if the amount thereof

is less than one dollar.

(iii) If the tax commission determines that such failure or delay was

due to reasonable cause and not due to willful neglect, it shall remit

all or part of such penalty. The tax commission shall promulgate rules

and regulations as to what constitutes reasonable cause.

(iv) If the failure to pay any tax within the time required by or

pursuant to this article is due to fraud, in lieu of the penalties and

interest provided for in subparagraphs (i) and (ii) of this paragraph,

there shall be added to the tax (A) a penalty of two times the amount of

tax due, plus (B) interest on such unpaid tax at the underpayment rate

set by the commissioner of taxation and finance pursuant to subdivision

twenty-sixth of section one hundred seventy-one of this chapter for the

period beginning on the last day prescribed by this article for the

payment of such tax (determined without regard to any extension of time

for paying) and ending on the day on which such tax is paid.

(v) The penalties and interest provided for in this paragraph shall be

determined, assessed, collected and paid in the same manner as the taxes

imposed by this article and shall be disposed of as hereinafter provided

with respect to moneys derived from the tax. Interest under this

paragraph shall be compounded daily.

(b) (i) In addition to any other penalty imposed by this article, the

commissioner may (A) impose a penalty of not more than six hundred

dollars for each two hundred cigarettes, or fraction thereof, in excess

of one thousand cigarettes in unstamped or unlawfully stamped packages

in the possession or under the control of any person or (B) impose a

penalty of not more than two hundred dollars for each ten unaffixed

false, altered or counterfeit cigarette tax stamps, imprints or

impressions, or fraction thereof, in the possession or under the control

of any person. In addition, the commissioner may impose a penalty of not

more than seventy-five dollars for each fifty cigars, one pound of

tobacco, or fifteen units of alternative nicotine products, or fraction

thereof, in excess of two hundred fifty cigars, five pounds of tobacco,

or seventy-five units of alternative nicotine products, in the

possession or under the control of any person and a penalty of not more

than one hundred fifty dollars for each fifty cigars, pound of tobacco,

or fifteen units of alternative nicotine products, or fraction thereof,

in excess of five hundred cigars, ten pounds of tobacco, or one hundred

fifty units of alternative nicotine products, in the possession or under

the control of any person, with respect to which the tobacco products

tax has not been paid or assumed by a distributor or tobacco products

dealer; provided, however, that any such penalty imposed shall not

exceed seven thousand five hundred dollars in the aggregate. The

commissioner may impose a penalty of not more than seventy-five dollars

for each fifty cigars, one pound of tobacco, or fifteen units of

alternative nicotine products, or fraction thereof, in excess of fifty

cigars, one pound of tobacco, or fifteen units of alternative nicotine

products, in the possession or under the control of any tobacco products

dealer or distributor appointed by the commissioner, and a penalty of

not more than one hundred fifty dollars for each fifty cigars, pound of

tobacco, or fifteen units of alternative nicotine products, or fraction

thereof, in excess of two hundred fifty cigars, five pounds of tobacco,

or seventy-five units of alternative nicotine products, in the

possession or under the control of any such dealer or distributor, with

respect to which the tobacco products tax has not been paid or assumed

by a distributor or a tobacco products dealer; provided, however, that

any such penalty imposed shall not exceed fifteen thousand dollars in

the aggregate.

(ii) The penalties imposed by this subparagraph may be imposed by the

commissioner in addition to any other penalty imposed by this article,

but in lieu of the penalties imposed by subparagraph (i) of this

paragraph:

(A)(I)(1) not less than thirty dollars but not more than two hundred

dollars for each two hundred cigarettes, or fraction thereof, in excess

of one thousand cigarettes but less than or equal to five thousand

cigarettes in unstamped or unlawfully stamped packages knowingly in the

possession or knowingly under the control of any person or (2) not less

than thirty dollars but not more than two hundred dollars for each ten

unaffixed false, altered or counterfeit cigarette tax stamps, imprints

or impressions, or fraction thereof, less than or equal to two hundred

fifty unaffixed false, altered or counterfeit cigarette tax stamps,

imprints or impressions, knowingly in the possession or knowing under

the control of any person;

(II)(1) not less than seventy-five dollars but not more than two

hundred dollars for each two hundred cigarettes, or fraction thereof, in

excess of five thousand cigarettes but less than or equal to twenty

thousand cigarettes in unstamped or unlawfully stamped packages

knowingly in the possession or knowingly under the control of any person

or (2) not less than seventy-five dollars but not more than two hundred

dollars for each ten unaffixed false, altered or counterfeit cigarette

tax stamps, imprints or impressions, or fraction thereof, in excess of

two hundred fifty unaffixed false, altered or counterfeit cigarette tax

stamps, imprints or impressions but less than or equal to one thousand

unaffixed false, altered or counterfeit cigarette tax stamps, imprints

or impressions, knowingly in the possession or knowingly under the

control of any person; and

(III)(1) not less than one hundred dollars but not more than two

hundred dollars for each two hundred cigarettes, or fraction thereof, in

excess of twenty thousand cigarettes in unstamped or unlawfully stamped

packages, knowingly in the possession or knowingly under the control of

any person or (2) not less than one hundred dollars but not more than

two hundred dollars for each ten unaffixed false, altered or counterfeit

cigarette tax stamps, imprints or impressions, or fraction thereof, in

excess of one thousand unaffixed false, altered or counterfeit cigarette

tax stamps, imprints or impressions, knowingly in the possession or

knowingly under the control of any person.

(B)(I) not less than twenty-five dollars but not more than one hundred

dollars for each fifty cigars, one pound of tobacco, or fifteen units of

alternative nicotine products, or fraction thereof, in excess of two

hundred fifty cigars, five pounds of tobacco, or seventy-five units of

alternative nicotine products, knowingly in the possession or knowingly

under the control of any person, with respect to which the tobacco

products tax has not been paid or assumed by a distributor or tobacco

products dealer; and

(II) not less than fifty dollars but not more than two hundred dollars

for each fifty cigars, pound of tobacco, or fifteen units of alternative

nicotine products, or fraction thereof, in excess of five hundred

cigars, ten pounds of tobacco, or one hundred fifty units of alternative

nicotine products, knowingly in the possession or knowingly under the

control of any person, with respect to which the tobacco products tax

has not been paid or assumed by a distributor or tobacco products

dealer; provided, however, that any such penalty imposed under this

clause shall not exceed ten thousand dollars in the aggregate.

(C)(I) not less than twenty-five dollars but not more than one hundred

dollars for each fifty cigars, one pound of tobacco, or fifteen units of

alternative nicotine products, or fraction thereof, in excess of fifty

cigars, one pound of tobacco, or fifteen units of alternative nicotine

products, knowingly in the possession or knowingly under the control of

any person, with respect to which the tobacco products tax has not been

paid or assumed by a distributor or tobacco products dealer; and

(II) not less than fifty dollars but not more than two hundred dollars

for each fifty cigars, pound of tobacco, or fifteen units of alternative

nicotine products, or fraction thereof, in excess of two hundred fifty

cigars, five pounds of tobacco, or seventy-five units of alternative

nicotine products, knowingly in the possession or knowingly under the

control of any person, with respect to which the tobacco products tax

has not been paid or assumed by a distributor or a tobacco products

dealer; provided, however, that any such penalty imposed under this

clause shall not exceed twenty thousand dollars in the aggregate.

(iii) Any penalty provided for in this paragraph shall be determined

as provided in section four hundred seventy-eight of this chapter, and

may be reviewed only pursuant to such section. Such penalty shall be

collected in the same manner as the taxes imposed by this article. The

commissioner in the commissioner's discretion, may remit all or part of

such penalty. Such penalty shall be paid to the department and disposed

of as hereinafter provided with respect to moneys derived from the tax.

(c) In addition to any other penalties that may be imposed by law, the

commissioner may impose a civil penalty not to exceed five thousand

dollars against any tobacco product manufacturer or cigarette tax agent

who violates the provisions of section four hundred eighty-b of this

article, including but not limited to the filing of a false

certification, and may seek to suspend or cancel any license,

registration or appointment which has been issued to such person

pursuant to this chapter.

(d) In addition to any other penalties that may be imposed by law, the

commissioner may impose a civil penalty not to exceed five thousand

dollars against any tobacco product manufacturer or distributor who

violates the provisions of section four hundred eighty-c of this

article, including but not limited to the filing of a false

certification, and may seek to suspend or cancel any license,

registration or appointment that has been issued to the tobacco product

manufacturer or distributor under this chapter.

2. (a) The possession within this state of more than four hundred

cigarettes in unstamped or unlawfully stamped packages or more than two

hundred fifty cigars, or more than five pounds of tobacco other than

roll-your-own tobacco, or more than thirty-six ounces of roll-your-own

tobacco, or more than seventy-five units of alternative nicotine

products, by any person other than an agent or distributor, as the case

may be, at any one time shall be presumptive evidence that such

cigarettes or tobacco products are subject to tax as provided by this

article.

(b) Nothing in this section shall apply to common or contract carriers

or warehousemen while engaged in lawfully transporting or storing

tobacco products or unstamped packages of cigarettes as merchandise, nor

to any employee of such carrier or warehouseman acting within the scope

of his employment, nor to public officers or employees in the

performance of their official duties requiring possession or control of

tobacco products or unstamped or unlawfully stamped packages of

cigarettes, nor to temporary incidental possession by employees or

agents of persons lawfully entitled to possession, nor to persons whose

possession is for the purpose of aiding police officers in performing

their duties.

3. For purposes of this chapter, the certificate of the commissioner

of taxation and finance to the effect that a tax or fee imposed by this

article has not been paid, that a return required by or under the

provisions of this article has not been filed, or that information has

not been supplied, as required by or under the provisions of this

article, or that a bond or other security required by or pursuant to the

provisions of this article has not been filed, or that books, accounts,

records, memoranda, documents or papers have not been supplied as

required by or pursuant to the authority of this article, or that a

retail dealer or vending machine owner or operator is not currently or

validly registered as required by this article shall be prima facie

evidence that such tax or fee has not been paid, such return not filed,

such information not supplied, such bond or other security not filed,

that such books, accounts, records, memoranda, documents or papers have

not been supplied, or that such retail dealer or vending machine owner

or operator is not currently or validly registered.

4. Cross-reference: For criminal penalties, see article thirty-seven

of this chapter.