N.Y. Tax Law § 483: Definitions

§ 483. Definitions. (a) Any term which is defined by section four

hundred seventy of this chapter shall have the same meaning when used in

this article, except that for purposes of this article the following

terms shall have the meanings herein indicated:

1. "Basic cost of cigarettes" shall mean the invoice cost of

cigarettes to the agent who purchases from the manufacturer, or the

replacement cost of cigarettes to the agent, in the quantity last

purchased, whichever is lower, less all trade discounts, except

discounts for cash, to which shall be added the full face value of any

stamps which may be required by law.

2. "Wholesale dealer" shall mean any person, other than an agent, who

sells cigarettes to retail dealers or other persons for purposes of

resale only and who maintains a separate warehousing facility for the

purpose of receiving and distributing cigarettes and conducting its

wholesale business. If such person is also a retail dealer, such person

shall maintain separate premises for such retail business. It shall not

include a vending machine operator.

3. "Chain store" shall mean any person or persons who owns or

maintains fifteen or more retail outlets in New York state, having one

hundred percent common ownership, through which cigarettes are sold at

retail. Vending machine operators who sell cigarettes at not less than

fifteen separate outlets shall be considered to be chain stores. It

shall also include cooperative members, franchisees and large volume

outlets. No person shall be considered to be a chain store unless such

person has been registered with the commissioner of taxation and finance

as provided in section four hundred eighty-nine of this chapter.

4. "Retail dealer" means any person engaged in selling cigarettes at

retail, and shall include a chain store, a wholesale dealer or an agent

for purposes of its sales of cigarettes to consumers.

5. "Cooperative member" shall mean any member of a "cooperative" as

defined in subdivision (c) of section three of the cooperative

corporations law, which operates a distribution center from which

members purchase grocery products, including prepackaged food and

non-food products such as paper products, soaps and detergents for

resale and whose members sell cigarettes at retail through fifteen or

more separate establishments in New York state. In order to qualify as a

"cooperative member" for the purposes of this article, a dealer must

share in the profits and losses of the cooperative and must have

purchased at least twenty-five percent of the merchandise it purchased

for resale during the preceding three months from such cooperative,

excluding cigarettes and petroleum products. Such volume of purchases

shall be measured by the amount paid for such merchandise, prior to any

patronage dividends or refunds based on patronage.

The registrations of those cooperative members registered as chain

stores prior to the effective date of the chapter of the laws of

nineteen hundred ninety which added this paragraph shall not be revoked

by reason of their failure to meet the twenty-five percent purchase

requirement, the requirement that a cooperative member belongs to a

cooperative which operates a distribution center or the sharing in the

profits and losses requirement of this paragraph five, and upon each

successive reregistration pursuant to section four hundred eighty-nine

of this chapter, such cooperative members shall not be subject to such

requirements, but shall be subject to all other requirements of this

article.

6. "Franchisee" shall mean any person or persons engaged in the sale

of cigarettes as a retail dealer who is a "franchisee" as defined in

article thirty-three of the general business law, and whose franchisor

franchises fifteen or more separate retail establishments in New York

state through which cigarettes are sold.

7. "Large volume outlet operator" shall mean any person or persons who

sell cigarettes at one or more retail outlets each of which had annual

gross sales in the previous calendar year of more than two million

dollars excluding petroleum products in this state.

(b) 1. (A) The term "cost of the agent" shall mean the basic cost of

cigarettes plus the cost of doing business by the agent as evidenced by

the accounting standards and methods regularly employed by said agent in

his determination of costs for the purpose of federal income tax

reporting for the total operation of his establishment, and must

include, without limitation, labor, including salaries of executives and

officers, rent, depreciation, selling costs, maintenance of equipment,

delivery costs, interest payable, all types of licenses, taxes,

insurance and advertising expressed as a percentage and applied to the

basic cost of cigarettes. Any fractional part of a cent in the cost to

the agent per carton of cigarettes shall be rounded off to the next

higher cent. In the case of sales at retail by an agent, the "cost of

the agent" shall be the same as the "cost of the retail dealer". In the

case of sales of cigarettes to a chain store having fifteen or more

retail outlets, excluding vending machine operators, which are delivered

to a central warehouse owned and operated by such chain store and which

are delivered to its retail outlets by the chain store, the "cost of the

agent" shall be presumed to be the basic cost of cigarettes. There shall

be determined a separate cost of the agent for sales to wholesale

dealers and for sales to retail dealers.

(B) In the absence of the filing with the commissioner of satisfactory

proof of a lesser cost of doing business of the agent making the sale,

the cost of doing business by the agent shall be presumed to be

seven-eighths of one percent of the basic cost of cigarettes for sales

to wholesale dealers plus one cent per package of ten cigarettes, two

cents per package of twenty cigarettes and in the case of a package

containing more than twenty cigarettes, two cents and one-half of a cent

for each five cigarettes in excess of twenty cigarettes, one and

one-half percent of the basic cost of cigarettes for sales to chain

stores plus one cent per package of ten cigarettes, two cents per

package of twenty cigarettes and in the case of a package containing

more than twenty cigarettes, two cents and one-half of a cent for each

five cigarettes in excess of twenty cigarettes and three and

seven-eighths percent of the basic cost of cigarettes with respect to

sales to retail dealers plus one cent per package of ten cigarettes, two

cents per package of twenty cigarettes and in the case of a package

containing more than twenty cigarettes, two cents and one-half of a cent

for each five cigarettes in excess of twenty cigarettes and the

foregoing cents per pack shall be included in the "cost of doing

business by the agent" referred to in paragraphs two and three of this

subdivision.

2. (A) The term "cost of the wholesale dealer" shall mean the basic

cost of cigarettes plus the cost of doing business by the wholesale

dealer as evidenced by the accounting standards and methods regularly

employed by said wholesale dealer in his determination of costs for the

purpose of federal income tax reporting for the total operation of his

establishment, and must include, without limitation, labor, including

salaries of executives and officers, rent, depreciation, selling costs,

maintenance of equipment, delivery costs, interest payable, all types of

licenses, taxes, insurance and advertising expressed as a percentage and

applied to the basic cost of cigarettes, plus the cost of doing business

by the agent with respect to sales of cigarettes to wholesale dealers.

Any fractional part of a cent in the cost to the wholesale dealer per

carton of cigarettes shall be rounded off to the next higher cent. In

the case of sales at retail by a wholesale dealer, the "cost of the

wholesale dealer" shall be the same as the "cost of the retail dealer".

There shall be determined a separate cost of the wholesale dealer for

sales to chain stores and for sales to retail dealers.

(B) In the absence of the filing with the tax commission of

satisfactory proof of a lesser cost of doing business of the wholesale

dealer making the sale, the cost of doing business by the wholesale

dealer with respect to sales to retail dealers shall be presumed to be

three per centum of the basic cost of cigarettes, and with respect to

sales to chain stores, five-eighths of one percent of the basic cost of

cigarettes.

3. (A) The term "cost of the retail dealer" shall mean the basic cost

of cigarettes plus the cost of doing business by the retail dealer as

evidenced by the accounting standards and methods regularly employed by

said retail dealer in his determination of costs for the purpose of

federal income tax reporting for the total operation of his

establishment, and shall include, without limitation, labor, including

salaries of executives and officers, rent, depreciation, selling costs,

maintenance of equipment, delivery costs, interest payable, all types of

licenses, taxes, insurance and advertising expressed as a percentage and

applied to the basic cost of cigarettes, plus the cost of doing business

by the agent with respect to sales of cigarettes to retail dealers. Any

fractional part of a cent in the cost to the retail dealer per package

or per carton shall be rounded off to the next higher cent.

(B) In the absence of the filing with the commissioner of taxation and

finance of satisfactory proof of a lesser cost of doing business by the

retail dealer making the sale, the cost of doing business by the retail

dealer shall be presumed to be seven per centum of the sum of the basic

cost of cigarettes plus the cost of doing business by the agent with

respect to cigarettes sold to retail dealers.