N.Y. Tax Law § 484: Unlawful acts; violations of article

§ 484. Unlawful acts; violations of article. (a) Notwithstanding any

other provision of law, it shall be unlawful and a violation of this

article:

1. For any agent, wholesale dealer or retail dealer, with intent to

injure competitors or destroy or substantially lessen competition, or

with intent to avoid the collection or paying over of such taxes as may

be required by law, to advertise, offer to sell, or sell cigarettes at

less than cost of such agent wholesale dealer or retail dealer, as the

case may be.

2. For any wholesale dealer:

(A) to induce or attempt to induce or to procure or attempt to procure

the purchase of cigarettes at a price less than the cost of the agent

with respect to sales to wholesale dealers; or

(B) to induce or attempt to induce or to procure or attempt to procure

any rebate or concession of any kind or nature whatsoever in connection

with the purchase of cigarettes.

3. For any chain store:

(A) to induce or attempt to induce or to procure or attempt to procure

the purchase of cigarettes at a price less than the cost of the agent

with respect to sales to chain stores; or

(B) to induce or attempt to induce or to procure or attempt to procure

any rebate or concession of any kind or nature whatsoever in connection

with the purchase of cigarettes.

4. For any retail dealer:

(A) to induce or attempt to induce or to procure or attempt to procure

the purchase of cigarettes at a price less than the cost of the agent

for sales to retail dealers, if purchased from an agent, or at a price

less than the cost of the wholesale dealer; or

(B) to induce or attempt to induce or to procure or attempt to procure

any rebate or concession of any kind or nature whatsoever in connection

with the purchase of cigarettes.

5. (A) Upon a first violation of any of the provisions of this

article, after due notice and opportunity for a hearing, the

commissioner may suspend the license of any agent or wholesale dealer

for a period of not more than thirty days or impose a civil fine not to

exceed twenty thousand dollars or both such suspension and fine.

(B) Upon a second or subsequent violation committed within three years

following a prior finding of violation, after due notice and opportunity

for a hearing, the commissioner shall revoke the license of any agent or

wholesale dealer unless (i) the penalty imposed for the first violation

was a fine only; or (ii) the commissioner determines, on a showing by

the agent or wholesale dealer, that the second or subsequent violation

is due to reasonable cause or that such agent or wholesale dealer acted

in good faith, in which case the commissioner may suspend such license

for a period of not more than sixty days or impose a civil fine not to

exceed fifty thousand dollars or both such suspension and fine.

(C) In determining whether to suspend or revoke or in assessing the

amount of any fine under this paragraph the commissioner shall give due

consideration to the gravity of the violation, the size of the agent's

or wholesale dealer's business, the amount of the sale in violation of

this article below the minimum markup and the history of previous

violations. The penalties provided for in this paragraph shall be

determined, assessed, collected and paid in the manner provided in

section four hundred seventy-eight of this chapter, as if such penalties

were taxes imposed pursuant to this article.

6. Evidence of advertisement, offering to sell or sale of cigarettes

by any agent, wholesale dealer, chain store or retail dealer at less

than cost, or evidence of any offer of a rebate in price, or giving of a

rebate in price, or an offer of a concession, or the giving of a

concession of any kind or nature whatsoever in connection with the sale

of cigarettes, or the inducing or attempt to induce or to the procuring

or the attempt to procure the purchase of cigarettes at a price less

than cost of the agent, wholesale dealer, chain store or the retail

dealer, shall be prima facie evidence of intent to injure competitors

and to destroy or substantially lessen competition, or of intent to

avoid the collection or paying over of such taxes as may be required by

law.

(b) 1. An action may be maintained in the supreme court to prevent,

restrain or enjoin a violation, or threatened violation, of any of the

provisions of this article. Such an action may be instituted by any

person injured by any violation or threatened violation of this article,

or by the tax commission. If in such action a violation or threatened

violation of this article shall be established, the court shall enjoin

and restrain, or otherwise prohibit, such violation or threatened

violation. In such action it shall not be necessary that actual damages

to the plaintiff be alleged or proved, but where alleged and proved, the

plaintiff in said action, in addition to such injunctive relief and

costs of suit, including reasonable attorney's fees, shall be entitled

to recover from the defendant the actual damages sustained by such

plaintiff.

2. In the event that no injunctive relief is sought or required, any

person injured by a violation of this article may maintain an action for

damages and costs of suit in the supreme court as provided for in the

civil practice law and rules.

(c) Any contract, expressed or implied, made by any person in

violation of any of the provisions of this article is declared to be an

illegal and void contract, and no recovery thereon shall be had.

(d) The provisions of this article shall not be applicable to any sale

as to which the tax imposed by section four hundred seventy-one of this

chapter is not applicable or to a sale to the department of corrections

and community supervision of this state for sale to or use by

incarcerated individuals in institutions under the jurisdiction of such

department.