BILL NUMBER: S93
SPONSOR: GALLIVAN
 
TITLE OF BILL:
An act to amend the tax law, in relation to excise taxes on cigars and
premium cigars
 
PURPOSE:
To establish the rate of the tobacco products tax exclusively for premi-
um cigars or cigars at seventy-five percent of the wholesale price or
fifty cents, whichever is less.
 
SUMMARY OF PROVISIONS:
Section 1 establishes a definition of "premium cigar" under section 470
of the tax law.
Section 2 makes necessary technical amendments to paragraph (a) of
subdivision 1 of § 471-b the tax law.
Section 3 amends subdivision 1 of § 471-b of the tax law governing the
imposition of a tobacco products tax by adding a new paragraph (d)
capping the amount of said tax for premium cigars and cigars at fifty
cents per item.
Section 4 establishes the effective date.
 
JUSTIFICATION:
Small business is the backbone of New York's economy. The recent
increase in the tobacco products tax, as codified pursuant to the FY
2021 State budget, on cigars and premium cigars in particular, has nega-
tively affected hundreds of independent retail tobacconist shops across
New York by driving consumers of such products to other outlets outside
the State or to locations not subject to the State's taxing authority.
This new tobacco products tax rate is also likely to have an adverse
effect on the expected increase in tax revenue as consumers shop else-
where. Moreover, this new tobacco products tax is inconsistent with the
tax rate imposed by contiguous states. Recently, the State of New Jersey
capped its tobacco products tax on cigars at fifty cents per item.
Establishing a rate cap on the products tax as proposed by this legis-
lation will conform such tax with an ever growing number of States doing
the same and is essential to maintaining a level playing field for small
business retail tobacconists.
 
LEGISLATIVE HISTORY:
2023-24: S.78 Referred to Budget and Revenue
2021-22: S.4820 Referred to Budget and Revenue
 
FISCAL IMPLICATIONS:
To be determined.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S93: 470 tax law, 471-b tax law, 471-b(1) tax law