S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4901

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            February 6, 2009
                               ___________

Introduced  by  M.  of  A.  CYMBROWITZ  -- read once and referred to the
  Committee on Ways and Means

AN ACT to amend the tax law, in relation to collecting the tax on  ciga-
  rettes; and to repeal section 471-e and subdivision 5 of section 480-a
  of such law relating thereto

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivisions 8, 9 and 11 of section 470  of  the  tax  law,
subdivisions  9  and  11  as  amended by chapter 61 of the laws of 1989,
subdivision 8 as amended by section 1 of part K of  chapter  61  of  the
laws  of  2005,  are amended and four new subdivisions 20, 21, 22 and 23
are added to read as follows:
  8. "Wholesale dealer." Any person, WHETHER LOCATED WITHIN  OR  OUTSIDE
OF  THIS  STATE,  who (a) sells cigarettes or tobacco products to retail
dealers or other persons for purposes of resale, or (b)  owns,  operates
or  maintains  one or more cigarette or tobacco product vending machines
in, at or upon premises owned or occupied by any other  person,  or  (c)
sells  cigarettes or tobacco products to an Indian nation or tribe or to
a reservation cigarette seller on a qualified reservation.    SUCH  TERM
SHALL  NOT INCLUDE ANY CIGARETTE MANUFACTURER, EXPORT WAREHOUSE PROPRIE-
TOR, OR IMPORTER WITH A VALID PERMIT UNDER 26 U.S.C.  S  5712,  IF  SUCH
PERSON  SELLS  OR  DISTRIBUTES CIGARETTES IN THIS STATE ONLY TO LICENSED
AGENTS, OR TO AN EXPORT WAREHOUSE  PROPRIETOR  OR  ANOTHER  MANUFACTURER
WITH A VALID PERMIT UNDER 26 U.S.C. S 5712.
  9.  "Retail  dealer." Any person, WHETHER LOCATED WITHIN OR OUTSIDE OF
THIS STATE, other than a wholesale dealer, engaged in selling cigarettes
or tobacco products TO A CONSUMER IN THIS STATE.
  11. "Agent." Any [person] WHOLESALE DEALER licensed by the commission-
er of taxation and finance to  purchase  and  affix  adhesive  or  meter
stamps on packages of cigarettes under this article.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02885-02-9

              

A. 4901                             2

  20.  "MANUFACTURER"  MEANS  ANY  PERSON  WHO MANUFACTURES, FABRICATES,
ASSEMBLES, PROCESSES, OR LABELS A FINISHED CIGARETTE.
  21.  "IMPORTER"  MEANS  ANY PERSON WHO IMPORTS INTO THE UNITED STATES,
EITHER DIRECTLY OR INDIRECTLY, A FINISHED CIGARETTE FOR SALE OR DISTRIB-
UTION.
  22.  "STAMP"  OR  "STAMPS"  MEANS   THE   INDICIA,   INCLUDING   METER
IMPRESSIONS,  REQUIRED TO BE PLACED ON A CIGARETTE PACKAGE THAT EVIDENCE
PAYMENT OF THE TAX ON CIGARETTES UNDER SECTION FOUR HUNDRED  SEVENTY-ONE
OF  THIS  ARTICLE,  OR THE INDICIA, INCLUDING METER IMPRESSIONS, USED TO
INDICATE THAT THE CIGARETTES ARE INTENDED FOR A SALE OR DISTRIBUTION  IN
THIS STATE THAT IS EXEMPT FROM STATE TAX UNDER PARAGRAPH (A) OF SUBDIVI-
SION ONE OF SECTION FOUR HUNDRED SEVENTY-ONE-E OF THIS ARTICLE.
  23.  "LICENSED," WHEN USED WITH REFERENCE TO A MANUFACTURER, IMPORTER,
AGENT, WHOLESALE DEALER OR RETAIL DEALER, MEANS ONLY THOSE  PERSONS  WHO
HOLD  A  VALID  AND  CURRENT  LICENSE  ISSUED UNDER SECTION FOUR HUNDRED
EIGHTY OF THIS ARTICLE FOR THE TYPE OF BUSINESS BEING ENGAGED  IN.  WHEN
THE TERM "LICENSED" IS USED BEFORE A LIST OF ENTITIES, SUCH AS "LICENSED
MANUFACTURER,  IMPORTER, AGENT OR DEALER," SUCH TERM SHALL APPLY TO EACH
ENTITY IN SUCH LIST.
  S 2. Subdivisions 2 and 3 of section 471 of the tax law, as amended by
chapter 6 of the laws of 1961, are amended to read as follows:
  2. It is intended that the ultimate incidence of and liability for the
tax shall be upon the consumer, and that any agent [or dealer] who shall
pay the tax to the [tax commission] COMMISSIONER shall collect  the  tax
from the purchaser or consumer. Except as [hereinafter] provided IN THIS
SUBDIVISION,  the tax shall be advanced and paid by the agent. The agent
shall be liable for the collection and payment of the tax on  cigarettes
imposed  by  this  article and shall pay the tax to the [tax commission]
COMMISSIONER  by  purchasing,  under  such  regulations  as   it   shall
prescribe, adhesive stamps of such designs and denominations as it shall
prescribe.  The tax on cigarettes may also be paid by or through the use
of metering machines if the [tax commission] COMMISSIONER so prescribes.
Agents, located within or without the state, shall purchase  stamps  and
affix  such stamps in the manner prescribed to packages of cigarettes to
be sold within the state[, in which case any dealer subsequently receiv-
ing such stamped packages of cigarettes will not be required to purchase
and affix stamps on such packages of cigarettes.    Notwithstanding  any
other  provision  of  this article, the tax commission may by regulation
provide that the tax on cigarettes imposed  by  this  article  shall  be
collected without the use of stamps].
  3. The amount of taxes advanced and paid by the agent as [hereinabove]
provided  IN THIS SECTION shall be added to and collected as part of the
sales price of the cigarettes.
  S 3. Section 471-a of the tax law, as amended by  section  2  of  part
RR-1 of chapter 57 of the laws of 2008, is amended to read as follows:
  S  471-a.  Use tax on cigarettes. There is hereby imposed and shall be
paid BY ANY CONSUMER a tax on all cigarettes used in the  state  by  any
[person]  SUCH  CONSUMER, except that no tax shall be imposed (1) if the
tax provided in section four hundred  seventy-one  of  this  article  is
paid, (2) on the use of cigarettes which are exempt from the tax imposed
by  said  section, or (3) on the use of four hundred or less cigarettes,
brought into the state on, or in the possession of, any [person] CONSUM-
ER.  Such tax on cigarettes shall be at the  rate  of  two  dollars  and
seventy-five  cents  for  each  twenty  cigarettes  or fraction thereof,
provided, however, that if a package of cigarettes  contains  more  than
twenty  cigarettes, the rate of tax on the cigarettes in such package in

A. 4901                             3

excess of twenty shall be sixty-eight and three-quarters cents for  each
five  cigarettes  or  fraction thereof.   Within twenty-four hours after
liability for the tax accrues, each such [person]  CONSUMER  shall  file
with  the  commissioner  a  return  in such form as the commissioner may
prescribe together with a remittance of the tax shown to be due thereon.
For purposes of this article, the word "use" means the exercise  of  any
right  or  power  actual  or  constructive  and shall include but is not
limited to the receipt, storage or any  keeping  or  retention  for  any
length  of time, but shall not include possession for sale, AND THE WORD
"CONSUMER" MEANS ANY PERSON WHO USES CIGARETTES  IN  THIS  STATE.    All
other  provisions of this article if not inconsistent shall apply to the
administration and enforcement of the tax imposed by this section in the
same manner as if the language of said provisions had been  incorporated
in full into this section.  BY FILING SUCH RETURN AND PAYING SUCH TAX, A
CONSUMER  SHALL  NOT BE RELIEVED OF ANY CRIMINAL OR CIVIL PENALTIES THAT
MAY BE APPLICABLE UNDER THIS ARTICLE OR  ARTICLE  THIRTY-SEVEN  OF  THIS
CHAPTER.
  S  4. Section 471-e of the tax law is REPEALED and a new section 471-e
is added to read as follows:
  S 471-E. APPLICATION OF TAX ON TRIBAL LANDS. 1.  EXEMPTION  FROM  TAX.
(A)  CIGARETTES SOLD TO OR RECEIVED BY MEMBERS OF A FEDERALLY RECOGNIZED
INDIAN TRIBE ON SUCH TRIBE'S INDIAN COUNTRY SHALL NOT BE SUBJECT TO  TAX
UNDER THIS ARTICLE.
  (B)  CIGARETTES  EXEMPT  FROM  TAX UNDER 26 U.S.C. S 5701 AND THAT ARE
DISTRIBUTED IN ACCORDANCE WITH FEDERAL REGULATIONS SHALL NOT BE  SUBJECT
TO TAX UNDER THIS ARTICLE.
  2.  TAX RATE ON SALES TO NON-TRIBAL MEMBERS ON INDIAN COUNTRY. THE TAX
RATE APPLICABLE TO CIGARETTES SOLD TO OR RECEIVED BY NON-TRIBAL  MEMBERS
ON INDIAN LANDS SHALL BE EQUAL TO THE STATE TAX RATE PROVIDED IN SECTION
FOUR  HUNDRED  SEVENTY-ONE OF THIS ARTICLE MINUS ANY TRIBAL TAX RATE, IF
THE RESULTING RATE IS A POSITIVE NUMBER AND SUCH RATE SHALL BE  ZERO  IF
THE RESULTING RATE WOULD BE A NEGATIVE NUMBER. CIGARETTES TAXED PURSUANT
TO  THIS  SUBDIVISION SHALL BEAR A TAX STAMP AS REQUIRED BY SECTION FOUR
HUNDRED SEVENTY-TWO OF THIS ARTICLE  IN  AN  AMOUNT  EQUAL  TO  THE  TAX
IMPOSED  BY  SECTION FOUR HUNDRED SEVENTY-ONE OF THIS ARTICLE; PROVIDED,
THAT THE COMMISSIONER SHALL PERIODICALLY REBATE  TO  ANY  INDIAN  TRIBAL
ENTITY  THAT  IS  IN COMPLIANCE WITH THIS ARTICLE AN AMOUNT EQUAL TO THE
TRIBAL TAX IMPOSED ON SALES UNDER THIS SUBDIVISION OR THE FACE VALUE  OF
THE  TAX  STAMPS AFFIXED TO CIGARETTES UNDER THIS SUBDIVISION, WHICHEVER
AMOUNT IS LESS.
  S 5. Subdivision 1 of section 472 of the tax law, as amended by  chap-
ter 629 of the laws of 1996, is amended, subdivisions 2 and 3 are renum-
bered  subdivisions  3 and 4 and a new subdivision 2 is added to read as
follows:
  1. The commissioner shall prescribe, prepare  and  furnish  stamps  of
such denominations and quantities as may be necessary for the payment of
the  tax  on  cigarettes imposed by this article, OR FOR INDICATION THAT
THE CIGARETTES ARE TAX-EXEMPT UNDER SECTION FOUR  HUNDRED  SEVENTY-ONE-E
OF  THIS  ARTICLE,  and  may from time to time and as often as he OR SHE
deems advisable provide for the issuance and exclusive use of stamps  of
a  new  design  and forbid the use of stamps of any other design, in the
manner and with the effect provided in section two hundred  seventy-four
of  this chapter. The commissioner shall make provisions for the sale of
such stamps at such places and at such times  as  he  OR  SHE  may  deem
necessary  and may license agents for such purpose. The commissioner may
license WHOLESALE dealers in cigarettes, who maintain separate warehous-

A. 4901                             4

ing facilities for the purpose of receiving and distributing  cigarettes
and conducting their business, AND who have received commitments from at
least  two  cigarette  manufacturers  whose aggregate market share is at
least forty percent of the New York state cigarette market, [and import-
ers, exporters and manufacturers of cigarettes, and other persons within
or  without the state as] OR ARE THEMSELVES ALSO LICENSED AS MANUFACTUR-
ERS, IMPORTERS OR agents to buy [or] AND affix  stamps  to  be  used  in
paying  the tax [herein] imposed BY THIS ARTICLE. NO PERSON OTHER THAN A
LICENSED AGENT MAY PURCHASE OR AFFIX STAMPS AND AGENTS SHALL NOT SELL OR
PROVIDE SUCH STAMPS TO ANY OTHER AGENT OR PERSON, but an agent shall  at
all  times have the right to appoint the person in his OR HER employ who
is to affix the stamps to any cigarettes under the agent's control.  The
fee  for  filing  such  application  for an agent's license shall be one
thousand five 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. All of the provisions of section  four  hundred
eighty  OF THIS ARTICLE relating to wholesale dealers' licenses, includ-
ing the procedure for suspension, revocation, refusal to license and for
hearings, except for paragraphs (c) and [(g)] (F) of subdivision one  of
such  section,  shall  be  applicable to agents' licenses applied for or
granted pursuant to this section, as if such  provisions  had  been  set
forth  in  full  in  this  subdivision and had expressly referred to the
applicant for, or the  holder  of,  an  agent's  license.  Whenever  the
commissioner  shall  sell and deliver to any such agent any such stamps,
such agent shall be entitled to receive as compensation for his  OR  HER
services  and  expenses  as  such  agent  in  [selling or] affixing such
stamps, and to retain out of the moneys to be paid by  him  OR  HER  for
such  stamps, a commission on the par value thereof. The commissioner is
hereby authorized to prescribe a schedule of commissions, not  exceeding
five  per  centum,  allowable to such agent for buying and affixing such
stamps. Such schedule shall be uniform with  respect  to  the  different
types  of  stamps  used, and may be on a graduated scale with respect to
the number of stamps purchased. The commissioner  may,  in  his  OR  HER
discretion,  permit  an  agent to pay for such stamps within thirty days
after the date of purchase and may require any such agent to  file  with
the  department  [of  taxation  and  finance]  a bond issued by a surety
company approved by the superintendent of insurance as to  solvency  and
responsibility and authorized to transact business in the state or other
security  acceptable  to the commissioner, in such amount as the commis-
sioner may fix, to secure the payment of any sums due  from  such  agent
pursuant  to this article. If securities are deposited as security under
this subdivision, such securities shall be kept in the  custody  of  the
commissioner and may be sold by the commissioner if it becomes necessary
so  to  do  in order to recover any sums due from such agent pursuant to
this article, but no such sale shall be had until after such agent shall
have had opportunity to litigate the validity of any tax if it elects so
to do. Upon any such sale, the surplus, if any, above the sums due under
this article shall be returned to such agent.
  2. STAMPS SHALL BE APPLIED BY A LICENSED  AGENT  TO  EACH  PACKAGE  OF
CIGARETTES  SOLD  OR DISTRIBUTED WITHIN THIS STATE AS FOLLOWS: (A) A TAX
STAMP SHALL BE APPLIED TO ALL CIGARETTE PACKAGES  CONTAINING  CIGARETTES
SUBJECT TO STATE TAX UNDER THIS ARTICLE, INCLUDING TO CIGARETTES SUBJECT
TO  REDUCED  STATE  TAX  UNDER  SUBDIVISION  TWO OF SECTION FOUR HUNDRED
SEVENTY-ONE-E OF THIS ARTICLE.
  (B) EXCEPT AS PROVIDED IN PARAGRAPH (C) OF THIS SUBDIVISION, A TAX-EX-
EMPT STAMP SHALL BE APPLIED TO ALL CIGARETTE PACKAGES INTENDED FOR  SALE

A. 4901                             5

OR  DISTRIBUTION  TO  CONSUMERS NOT SUBJECT TO STATE TAX UNDER PARAGRAPH
(A) OF SUBDIVISION ONE OF SECTION FOUR  HUNDRED  SEVENTY-ONE-E  OF  THIS
ARTICLE.
  (C) NO STAMP SHALL BE APPLIED TO ANY CIGARETTE PACKAGE EXEMPT FROM TAX
UNDER  PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION FOUR HUNDRED SEVENTY-
ONE-E OF THIS ARTICLE.
  S 6. Section 473 of the tax law, as amended by chapter 489 of the laws
of 1940, is amended to read as follows:
  S 473. Affixation and cancellation of stamps; presumption. Each  agent
[shall affix] within [the time hereinafter prescribed] TEN CALENDAR DAYS
OF  RECEIPT OF ANY CIGARETTES, SHALL AFFIX to each package of SUCH ciga-
rettes, stamps evidencing the payment of the tax imposed by this article
OR STAMPS EVIDENCING THE EXEMPTION FROM PAYMENT OF THE  TAX  IMPOSED  BY
THIS  ARTICLE and shall cancel such stamps, WITH A NUMBER UNIQUE TO SUCH
AGENT THAT IS LEGIBLE AT THE POINT OF SALE, before such  cigarettes  are
offered for sale or before they are otherwise disposed of, unless stamps
have  been  affixed  to such packages of cigarettes and cancelled before
such agent received them. Each dealer, other than an agent, shall  imme-
diately  upon the receipt of any cigarettes at his OR HER place of busi-
ness mark in ink on each unopened box, carton or other container of such
cigarettes the word "received" and the year, month, day and hour of such
receipt, and shall affix his OR HER signature thereto, or in  any  other
manner prescribed.
  Each  retail  dealer  shall  open  such box, carton or other container
within twenty-four hours after such receipt and prior  to  exposing  for
sale or selling such cigarettes and examine the packages contained ther-
ein  for  the  purpose  of ascertaining whether or not the said packages
have affixed thereto the proper tax stamp; if  unstamped  or  improperly
stamped  packages  of cigarettes are discovered, the retail dealer shall
immediately notify the WHOLESALE dealer from whom said  cigarettes  were
purchased.   Upon such notification, the WHOLESALE dealer from whom said
cigarettes were purchased will  replace  such  unstamped  or  improperly
stamped  packages  of  cigarettes with those upon which stamps have been
properly affixed.
  Whenever any cigarettes are found in the place  of  business  of  such
dealer,  other  than an agent, without the stamps affixed and cancelled,
or not marked as having been received within the  preceding  twenty-four
hours, the presumption shall be that such cigarettes are kept therein in
violation  of the provisions of this article. Stamps shall be affixed to
each package of cigarettes of an aggregate denomination  not  less  than
the amount of the tax upon the contents therein, and shall be affixed in
such manner as to be visible to the purchaser.
  S  7.  The tax law is amended by adding a new section 473-c to read as
follows:
  S 473-C. DUTIES OF MANUFACTURERS, IMPORTERS, AGENTS, AND  DEALERS.  1.
AGENTS  MAY  APPLY  STAMPS  ONLY  TO  CIGARETTE  PACKAGES THAT THEY HAVE
RECEIVED DIRECTLY FROM A LICENSED  MANUFACTURER  OR  IMPORTER  OF  CIGA-
RETTES.
  2.  AGENTS  SHALL  BE  PERMITTED  TO SET ASIDE, WITHOUT APPLICATION OF
STAMPS, ONLY SUCH PART OF THE AGENT'S STOCK THAT IS IDENTIFIED FOR  SALE
OR DISTRIBUTION OUTSIDE OF THIS STATE; PROVIDED, THAT ANY SUCH UNSTAMPED
CIGARETTES  SHALL  BE STORED SEPARATELY FROM STAMPED CIGARETTE PACKAGES.
NO AGENT SHALL TRANSFER UNSTAMPED CIGARETTE PACKAGES TO ANOTHER FACILITY
OF THE AGENT WITHIN THIS STATE OR TO ANOTHER PERSON WITHIN THIS STATE.
  3. A MANUFACTURER OR IMPORTER MAY SELL OR DISTRIBUTE CIGARETTES  TO  A
PERSON  LOCATED  OR  DOING  BUSINESS WITHIN THIS STATE (INCLUDING ON ANY

A. 4901                             6

TRIBAL LANDS LOCATED WITHIN  THIS  STATE)  ONLY  IF  SUCH  PERSON  IS  A
LICENSED  IMPORTER OR AGENT. AN IMPORTER MAY OBTAIN CIGARETTES ONLY FROM
A LICENSED MANUFACTURER. AN AGENT MAY  OBTAIN  CIGARETTES  ONLY  FROM  A
LICENSED  MANUFACTURER, IMPORTER OR AGENT. AN AGENT MAY SELL OR DISTRIB-
UTE CIGARETTES TO A PERSON LOCATED OR DOING BUSINESS WITHIN  THIS  STATE
(INCLUDING  ON  ANY TRIBAL LANDS LOCATED WITHIN THIS STATE) ONLY IF SUCH
PERSON IS A LICENSED AGENT, WHOLESALE DEALER OR RETAIL DEALER. A  RETAIL
DEALER  MAY  OBTAIN  CIGARETTES  ONLY FROM A LICENSED AGENT OR WHOLESALE
DEALER.
  4. ANY PERSON WHO IS DOING BUSINESS BOTH AS AN AGENT AND  A  WHOLESALE
DEALER OR A RETAIL DEALER, SHALL MAINTAIN SEPARATE AREAS FOR STAMPED AND
UNSTAMPED PRODUCT.
  5.  (A)  A  RETAIL  DEALER SHALL REPORT TO THE COMMISSION EACH SALE OR
DISTRIBUTION OF MORE THAN ONE THOUSAND CIGARETTES TO ANY CONSUMER IN ANY
SINGLE TRANSACTION. SUCH REPORT SHALL INCLUDE:
  (I) THE NAME, ADDRESS, DESTINATION (INCLUDING STREET ADDRESS), VEHICLE
LICENSE NUMBER, DRIVER'S LICENSE NUMBER, SIGNATURE OF THE PERSON RECEIV-
ING SUCH CIGARETTES, AND THE NAME OF THE PURCHASER;
  (II) A DECLARATION OF THE SPECIFIC PURPOSE OF  THE  RECEIPT  (PERSONAL
USE, RESALE, OR DELIVERY TO ANOTHER); AND
  (III) A DECLARATION OF THE NAME AND ADDRESS OF THE RECIPIENT'S PRINCI-
PAL IN ALL CASES WHEN THE RECIPIENT IS ACTING AS AN AGENT.
  (B)  A  RETAIL  DEALER SHALL NOT KNOWINGLY SELL MORE THAN ONE THOUSAND
CIGARETTES TO ANY PERSON IN ANY SERIES OF TRANSACTIONS  IN  ANY  TWO-DAY
PERIOD  WITHOUT  FILING  A  REPORT  AS REQUIRED BY PARAGRAPH (A) OF THIS
SUBDIVISION.
  S 8. Subdivisions 1 and 4 of section 474 of the tax law, as amended by
chapter 61 of the laws of 1989, are amended to read as follows:
  1. (A) Every person who shall possess or transport any unstamped ciga-
rettes upon the public highways, roads or streets of the state, shall be
required to have in his OR HER actual possession  invoices  or  delivery
tickets  for  such  cigarettes.  Such invoices or delivery tickets shall
show the name and address of the  consignor  or  seller,  the  name  and
address  of  the  consignee  or  purchaser, the quantity [and brands] BY
BRAND STYLE of the cigarettes transported, and the name and  address  of
the  person  who has or shall assume the payment of the tax. The absence
of such invoices or delivery tickets shall be prima facie evidence  that
such  person  is a dealer in cigarettes in this state and subject to the
provisions of this article.
  (B) ANY PERSON WHO SHIPS UNSTAMPED CIGARETTE PACKAGES INTO THIS  STATE
OTHER  THAN  TO  A  LICENSED MANUFACTURER, IMPORTER OR AGENT SHALL FIRST
FILE WITH THE COMMISSIONER NOTICE OF SUCH SHIPMENT. THIS PARAGRAPH SHALL
NOT APPLY TO ANY COMMON OR CONTRACT CARRIER THAT IS  TRANSPORTING  CIGA-
RETTES  THROUGH  THIS  STATE  TO ANOTHER LOCATION UNDER A PROPER BILL OF
LADING OR FREIGHT BILL,  WHICH  STATES  THE  QUANTITY  BY  BRAND  STYLE,
SOURCE, AND DESTINATION OF SUCH CIGARETTES.
  4. At the time of delivering cigarettes to any person each MANUFACTUR-
ER,  IMPORTER,  agent or wholesale dealer, and at the time of delivering
tobacco products to any person each distributor or wholesale  dealer  of
tobacco  products,  shall make a true duplicate invoice showing the date
of delivery, the number of packages BY BRAND STYLE and number  of  ciga-
rettes  contained therein, in each shipment of cigarettes delivered, and
the items and quantity and wholesale price of each item in each shipment
of tobacco products delivered, and the name of  the  purchaser  to  whom
delivery is made, and shall retain the same for a period of [three] FIVE
years subject to the use and inspection of the commissioner [of taxation

A. 4901                             7

and  finance]. Each dealer shall procure and retain invoices showing the
number of packages BY BRAND STYLE and  number  of  cigarettes  contained
therein,  in each shipment of cigarettes received by him OR HER, and the
items  and quantity and wholesale price of each item in each shipment of
tobacco products received by him OR HER, the date thereof, and the  name
of  the  shipper, and shall retain the same for a period of [three] FIVE
years subject to the use and inspection of the commissioner [of taxation
and finance]. The commissioner [of taxation and finance]  by  regulation
may  provide  that  whenever  cigarettes or tobacco products are shipped
into the state, the railroad company, express company, trucking  company
or  other  public  carrier  transporting any shipment thereof shall file
with the commissioner [of taxation and finance] a copy  of  the  freight
bill  within  ten days after the delivery in the state of each shipment.
All dealers shall maintain and keep for a period of [three]  FIVE  years
such  other  records of cigarettes or tobacco products received, sold or
delivered within the state as may be required by  the  commissioner  [of
taxation  and  finance].  The  commissioner [of taxation and finance] is
hereby authorized to examine  the  books,  papers,  invoices  and  other
records  of  any  person  WHO HOLDS A LICENSE OR REGISTRATION UNDER THIS
ARTICLE OR WHO IS in possession, control or occupancy  of  any  premises
where cigarettes or tobacco products are placed, stored, sold or offered
for  sale, and the equipment of any such person pertaining to the stamp-
ing of cigarettes or the sale and  delivery  of  cigarettes  or  tobacco
products  taxable under this article, as well as the stock of cigarettes
or tobacco products in any such premises or vehicle. To verify the accu-
racy of the tax imposed and assessed by this article, each  such  person
is hereby directed and required to give to the commissioner [of taxation
and  finance]  or his OR HER duly authorized representatives, the means,
facilities  and  opportunity  for  such  examinations  as  are  [herein]
provided  for IN THIS SECTION and required.  ALL INVOICES REQUIRED TO BE
RETAINED BY THIS SECTION SHALL SHOW THE NAME AND ADDRESS OF  THE  SELLER
AND THE QUANTITY BY BRAND STYLE OF THE CIGARETTES INVOLVED IN THE TRANS-
ACTION  AND  SHALL  BE  ITEMIZED  FOR EACH FACILITY OF THE MANUFACTURER,
IMPORTER, AGENT OR WHOLESALE DEALER.  RECORDS REQUIRED UNDER THIS  ARTI-
CLE SHALL BE PRESERVED ON THE PREMISES DESCRIBED IN THE RELEVANT LICENSE
OR REGISTRATION IN SUCH A MANNER AS TO ENSURE PERMANENCY AND ACCESSIBIL-
ITY  FOR  INSPECTION  AT REASONABLE HOURS BY AUTHORIZED PERSONNEL OF THE
TAX COMMISSION. WITH THE PERMISSION OF THE  COMMISSIONER,  PERSONS  WITH
MULTIPLE  PLACES  OF  BUSINESS MAY RETAIN CENTRALIZED RECORDS, BUT SHALL
TRANSMIT DUPLICATES OF THE INVOICES OR THE EQUIVALENT  DOCUMENTATION  TO
EACH  PLACE OF BUSINESS WITHIN TWENTY-FOUR HOURS UPON THE REQUEST OF THE
COMMISSIONER.
  THE COMMISSIONER AND HIS OR HER DESIGNEES AND THE UNITED STATES SECRE-
TARY OF THE TREASURY OR HIS OR HER DESIGNEE, UPON  REQUEST,  SHALL  HAVE
ACCESS TO RECORDS REQUIRED UNDER THIS SECTION AND REPORTS REQUIRED UNDER
SECTION FOUR HUNDRED SEVENTY-FOUR-A OF THIS ARTICLE. THE COMMISSIONER AT
HIS OR HER SOLE DISCRETION MAY SHARE THE RECORDS AND REPORTS REQUIRED BY
THIS ARTICLE WITH OTHER LAW ENFORCEMENT OFFICIALS OF THE FEDERAL GOVERN-
MENT  OR  OTHER  STATES. PUBLIC ACCESS TO REPORTS SUBMITTED BY LICENSEES
SHALL BE PROVIDED UNDER THE PROCEDURES ESTABLISHED BY THE NEW YORK FREE-
DOM OF INFORMATION LAW. IN NO CASE,  HOWEVER,  SHALL  INFORMATION  ABOUT
QUANTITIES OF CIGARETTES BY BRAND STYLE BE RELEASED TO ANYONE OTHER THAN
THE  COMMISSIONER, THE UNITED STATES SECRETARY OF THE TREASURY, OR OTHER
STATE AND FEDERAL LAW ENFORCEMENT OFFICIALS WITH WHOM  THE  COMMISSIONER
HAS ELECTED TO SHARE REPORTS AND RECORDS REQUIRED BY THIS ARTICLE.

A. 4901                             8

  S  9.  The tax law is amended by adding a new section 474-a to read as
follows:
  S  474-A.  REPORTS.  1. AGENTS AND DEALERS SHALL SUBMIT TO THE COMMIS-
SIONER MONTHLY REPORTS SETTING FORTH THE FOLLOWING INFORMATION, ITEMIZED
OR SUBMITTED SEPARATELY FOR EACH OF THEIR PLACES OF  BUSINESS:  (A)  THE
QUANTITIES  OF CIGARETTES, BY BRAND STYLE, ON HAND BOTH AT THE BEGINNING
AND ENDING OF THE REPORTING PERIOD;
  (B) THE QUANTITIES OF CIGARETTES, BY BRAND STYLE AND TRANSACTION, THAT
WERE RECEIVED DURING THE REPORTING PERIOD AND THE NAME  AND  ADDRESS  OF
EACH PERSON FROM WHOM THOSE PRODUCTS WERE RECEIVED;
  (C)  THE  QUANTITIES  OF  CIGARETTES,  BY BRAND STYLE AND TRANSACTION,
DISTRIBUTED OR SHIPPED INTO THIS STATE  OR  BETWEEN  LOCATIONS  IN  THIS
STATE  DURING THE REPORTING PERIOD (OTHER THAN SALES DIRECTLY TO CONSUM-
ERS) AND THE NAME AND ADDRESS OF EACH PERSON TO WHOM THOSE PRODUCTS WERE
DISTRIBUTED OR SHIPPED;
  (D) THE QUANTITIES OF CIGARETTES,  BY  BRAND  STYLE  AND  TRANSACTION,
DISTRIBUTED  OR  SHIPPED  TO ANY DESTINATION WHEREVER LOCATED, INCLUDING
THE QUANTITIES REPORTED UNDER PARAGRAPH (C) OF THIS SUBDIVISION,  DURING
THE  REPORTING  PERIOD  (OTHER THAN SALES DIRECTLY TO CONSUMERS) AND THE
NAME AND ADDRESS OF EACH PERSON TO WHOM THOSE PRODUCTS WERE  DISTRIBUTED
OR SHIPPED; AND
  (E)  THE  QUANTITIES OF CIGARETTES, BY BRAND STYLE, SOLD TO CONSUMERS,
ITEMIZED TO SHOW SALES TO CONSUMERS IN THIS STATE AND SALES TO CONSUMERS
OUTSIDE OF THIS STATE.
  2. MANUFACTURERS AND IMPORTERS SHIPPING CIGARETTES INTO OR WITHIN THIS
STATE SHALL FILE A MONTHLY REPORT WITH THE COMMISSIONER  CONTAINING  THE
INFORMATION  REGARDING  SUCH  CIGARETTES  SET  FORTH IN PARAGRAPH (C) OF
SUBDIVISION ONE OF THIS SECTION.
  3. INDIAN TRIBAL ENTITIES ENGAGED IN THE RETAIL SALE  OR  DISTRIBUTION
OF CIGARETTES SHALL INCLUDE IN SUCH ENTITIES' REPORTS SUBMITTED PURSUANT
TO  SUBDIVISION  ONE  OF  THIS  SECTION THE NAMES AND ADDRESSES OF EVERY
TRIBAL MEMBER THAT PURCHASED CIGARETTES DURING THE REPORTING PERIOD  AND
THE  QUANTITY  OF  CIGARETTES,  BY  BRAND  STYLE, PURCHASED BY EACH SUCH
TRIBAL MEMBER.
  4. THE REPORTS SUBMITTED PURSUANT TO SUBDIVISION ONE OF  THIS  SECTION
SHALL  BE  FURTHER  ITEMIZED  TO DISCLOSE THE QUANTITY OF REPORTED CIGA-
RETTES BEARING TAX STAMPS OF THIS  STATE,  TAX  EXEMPT  STAMPS  OF  THIS
STATE,  STAMPS OF ANOTHER STATE, AND UNSTAMPED CIGARETTES. AGENT REPORTS
SHALL INCLUDE, IF APPLICABLE, THE QUANTITY  OF  NEW  YORK  TAX  AND  TAX
EXEMPT  STAMPS THAT WERE NOT AFFIXED TO CIGARETTES AND THAT WERE ON HAND
AT THE BEGINNING AND ENDING OF THE REPORTING  PERIOD,  THE  QUANTITY  OF
EACH  TYPE  OF  NEW YORK STAMP RECEIVED DURING THE REPORTING PERIOD, AND
THE QUANTITY OF EACH TYPE OF NEW YORK STAMP APPLIED DURING THE REPORTING
PERIOD.
  5. THE COMMISSIONER MAY ISSUE REGULATIONS  REQUIRING  SUCH  ADDITIONAL
INFORMATION  IN THE MONTHLY REPORTS AS HE OR SHE MAY DETERMINE IS NECES-
SARY OR APPROPRIATE FOR PURPOSES OF ENFORCING  THE  PROVISIONS  OF  THIS
ARTICLE.
  S  10.  Section  475 of the tax law is amended by adding a new closing
paragraph to read as follows:
  IN ANY CASE WHERE THE COMMISSIONER  OR  HIS  OR  HER  DULY  AUTHORIZED
AGENT,  OR  ANY POLICE OR PEACE OFFICER OF NEW YORK STATE, HAS KNOWLEDGE
OR REASONABLE GROUNDS TO BELIEVE THAT ANY VEHICLE IS TRANSPORTING  CIGA-
RETTES  IN  VIOLATION  OF THIS ARTICLE, THE COMMISSIONER, SUCH AGENT, OR
SUCH POLICE OR PEACE OFFICER, IS AUTHORIZED TO STOP SUCH VEHICLE AND  TO
INSPECT THE SAME FOR CONTRABAND CIGARETTES.

A. 4901                             9

  S 11. Section 476 of the tax law, as amended by chapter 61 of the laws
of 1989, is amended to read as follows:
  S  476.  Refunds;  sales of stamps. Whenever any cigarettes upon which
stamps have been placed or tobacco products upon which the tax has  been
paid have been sold and shipped into another state for sale or use there
or  have become unfit for use and consumption or unsalable, or have been
destroyed (EXCEPT FOR CIGARETTES DESTROYED PURSUANT TO SECTION  EIGHTEEN
HUNDRED  FORTY-SIX  OF  THIS  CHAPTER), or whenever the commissioner [of
taxation and finance] shall have determined that any tax imposed by this
article shall have been paid in error,  the  agent,  dealer  or  tobacco
products  distributor, as the case may be, shall be entitled to a refund
of the actual amount of tax so paid, provided  application  therefor  is
filed  with  the commissioner [of taxation and finance] within two years
after the stamps were affixed to such cigarettes or  the  tax  was  paid
upon  such tobacco products, except if an agreement under the provisions
of section four hundred seventy-eight OF  THIS  ARTICLE  (extending  the
period  for determination of tax imposed by this article) is made within
the two-year period for the filing of an application for refund provided
for in this section, the period for filing  an  application  for  refund
shall  not expire prior to six months after the expiration of the period
within which a determination may be made pursuant to  the  agreement  or
any  extension thereof. If the commissioner [of taxation and finance] is
satisfied that any AGENT OR dealer is entitled to a  refund  he  OR  SHE
shall  issue  to such [dealer] AGENT stamps of sufficient value to cover
the refund of the tax on cigarettes or may,  subject  to  audit  by  the
comptroller,  make  a  refund  of  the  tax  on cigarettes or on tobacco
products TO SUCH AGENT. No person shall sell or offer for sale any stamp
or stamps issued under this article except by written permission of  the
commissioner  [of  taxation  and finance]. The commissioner [of taxation
and finance] may redeem unused stamps  lawfully  in  possession  of  any
[person] AGENT. The commissioner [of taxation and finance] may prescribe
necessary rules and regulations concerning refunds, sales of stamps, and
redemptions under the provisions of this article.
  S  12. Subdivisions 1, 5 and paragraph (a) of subdivision 6 of section
480 of the tax law, subdivision 1 as amended by chapter 629 of the  laws
of 1996, paragraph (k) of subdivision 1 as amended by chapter 262 of the
laws  of 2000, subdivision 5 as added by chapter 860 of the laws of 1987
and paragraph (a) of subdivision 6 as amended by chapter 576 of the laws
of 1994, are amended, subdivision 3 is amended by adding a new paragraph
(c) and a new subdivision 7 is added to read as follows:
  1. General. (a) [On and after July first, nineteen hundred thirty-nine
no] NO person shall be a MANUFACTURER,  IMPORTER,  AGENT,  OR  wholesale
dealer unless he OR SHE has been granted and publicly displays in his OR
HER place of business a license from the department FOR EACH SUCH ACTIV-
ITY ENGAGED IN. EACH PLACE OF BUSINESS IN THIS STATE SHALL BE SEPARATELY
LICENSED.  IF  THE  APPLICANT  DOES NOT HAVE A PLACE OF BUSINESS IN THIS
STATE, THE LICENSE SHALL BE ISSUED FOR SUCH APPLICANT'S PRINCIPAL  PLACE
OF  BUSINESS, WHEREVER LOCATED.  Applications for licenses shall be made
on forms prescribed by the commissioner.  EACH APPLICATION  SHALL  STATE
THE  NAME  AND  ADDRESS OF THE APPLICANT; THE ADDRESS OF THE APPLICANT'S
PRINCIPAL PLACE OF BUSINESS; EACH PLACE OF  BUSINESS  WHERE  THE  APPLI-
CANT'S  BUSINESS  WILL  BE  CONDUCTED  WITHIN  THIS STATE; AND ANY OTHER
INFORMATION SUCH COMMISSIONER MAY REQUIRE. IF THE APPLICANT IS  A  FIRM,
PARTNERSHIP,  OR  ASSOCIATION,  THE APPLICATION SHALL STATE THE NAME AND
ADDRESS OF EACH OF ITS MEMBERS. IF THE APPLICANT IS A  CORPORATION,  THE
APPLICATION  SHALL STATE THE NAME AND ADDRESS OF EACH OF ITS MEMBERS. IF

A. 4901                            10

THE APPLICANT IS A CORPORATION, THE APPLICATION SHALL STATE THE NAME AND
ADDRESS OF EACH OF ITS OFFICERS AND THE NAME OF  ANY  PERSON  WHO  OWNS,
DIRECTLY  OR  INDIRECTLY, IN THE AGGREGATE, MORE THAN TEN PERCENT OF THE
OWNERSHIP INTERESTS IN THE CORPORATION.
  (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 insurance as to solven-
cy  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 THIS 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  main-
tain 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 sepa-
rate, 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)] (E) Each applicant shall submit proof of United States  citizen-
ship 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)] (F) 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)]  (G)  Except  as provided in subdivision four of this section, a
license shall continue in effect [until revoked or suspended  for  cause
or  surrendered] FOR SUCH LENGTH OF TIME AS DETERMINED BY REGULATIONS OF
THE COMMISSIONER; IN NO CASE, HOWEVER, SHALL A LICENSE ISSUED UNDER THIS
SECTION REMAIN IN EFFECT FOR A PERIOD LONGER THAN THREE YEARS.
  [(i)] (H) 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)] (I) The commissioner may for  cause  refuse  to  issue,  or  may
suspend  or  revoke  [a wholesaler's] ANY license UNDER THIS SECTION, or
may forbid a retail dealer to continue  selling  cigarettes  or  tobacco
products  or may forbid a person required to be appointed as a distribu-
tor of tobacco products who has not been so appointed from selling ciga-
rettes or tobacco products, after an opportunity for  hearing  has  been
afforded.  A  violation of any provision of this article or of any regu-
lation issued under it shall be cause to SUSPEND  OR  REVOKE  A  LICENSE
ISSUED UNDER THIS SECTION OR TO forbid a retail dealer to continue sell-
ing cigarettes or tobacco products.
  [(k)] (J) 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 deal-

A. 4901                            11

er 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 arti-
cle.
  [(l)] (K) Paragraphs (b), (c) and [(g)] (F) 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 ciga-
rette or tobacco products vending machines in, at or upon premises owned
or occupied by another person and  the  sale  of  tobacco  products  for
resale.
  (C)  LICENSE  AVAILABILITY. NOTWITHSTANDING OTHER SUBDIVISIONS OF THIS
SECTION, NO LICENSE SHALL BE  GRANTED,  MAINTAINED  OR  RENEWED  IF  THE
APPLICANT OR ANY CONTROLLING PERSON:
  (I) OWES FIVE HUNDRED DOLLARS OR MORE IN DELINQUENT CIGARETTE TAXES;
  (II)  HAD  A  LICENSE UNDER THIS SECTION OR REGISTRATION UNDER SECTION
FOUR HUNDRED EIGHTY-A OF THIS ARTICLE REVOKED BY THE COMMISSIONER WITHIN
THE PAST TWO YEARS;
  (III) HAS BEEN CONVICTED OF A CRIME RELATING TO STOLEN OR  COUNTERFEIT
CIGARETTES;
  (IV)  IS  A  CIGARETTE  MANUFACTURER OR IMPORTER THAT IS NEITHER (A) A
PARTICIPATING MANUFACTURER (AS SUCH TERM IS DEFINED IN SUBSECTION II(JJ)
OF THE MASTER SETTLEMENT AGREEMENT, AS REQUIRED IN  SUBDIVISION  ONE  OF
SECTION  THIRTEEN  HUNDRED  NINETY-NINE-PP OF THE PUBLIC HEALTH LAW; NOR
(B) IN FULL COMPLIANCE WITH SECTION FOUR HUNDRED EIGHTY-B OF THIS  ARTI-
CLE  AND  SUBDIVISION  TWO OF SECTION THIRTEEN HUNDRED NINETY-NINE-PP OF
THE PUBLIC HEALTH LAW;
  (V) HAS IMPORTED, OR CAUSED TO BE IMPORTED, INTO THE UNITED STATES ANY
CIGARETTE IN VIOLATION OF 19 U.S.C. 1681A; OR
  (VI) HAS IMPORTED, OR CAUSED TO BE IMPORTED INTO THE UNITED STATES, OR
MANUFACTURED FOR SALE OR DISTRIBUTION IN THE UNITED STATES ANY CIGARETTE
THAT DOES NOT FULLY COMPLY  WITH  THE  FEDERAL  CIGARETTE  LABELING  AND
ADVERTISING ACT (15 U.S.C. 1331, ET SEQ.).
  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] ANY PERSON 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, includ-
ing,  but  not limited to, those provisions authorizing the [tax commis-
sion] COMMISSIONER 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

A. 4901                            12

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,  suspen-
sion  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] COMMISSIONER 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]  UNDER  THIS  ARTICLE,  a notice of
proposed refusal to license shall be issued promptly  after  application
for  license  is  received  by the [tax commission] COMMISSIONER.   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] COMMIS-
SIONER  shall  issue a notice of refusal to license or shall license the
applicant. If the [tax commission] COMMISSIONER 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]  COMMISSIONER
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] COMMISSIONER.
  (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  UNDER THIS ARTICLE or of a licensee under this arti-
cle, or
  7. MAINTENANCE OF LIST OF LICENSEES. THE COMMISSIONER SHALL CREATE AND
MAINTAIN A WEBSITE SETTING FORTH THE IDENTITY OF PERSONS  HOLDING  VALID
AND  CURRENT  LICENSES  UNDER  THIS SECTION, ITEMIZED BY TYPE OF LICENSE
POSSESSED, AND THE IDENTITY OF PERSONS HOLDING VALID AND CURRENT  REGIS-
TRATIONS  UNDER SECTION FOUR HUNDRED EIGHTY-A OF THIS ARTICLE, AND SHALL
UPDATE THE SITE NO LESS FREQUENTLY THAN ONCE PER MONTH.
  S 13. Paragraph (d) of subdivision 1, subdivision 3 and paragraph  (a)
of  subdivision  4  of  section  480-a  of the tax law, paragraph (d) of
subdivision 1 as added by chapter 799 of the laws of 1992, subdivision 3
as amended by chapter 262 of the laws  of  2000  and  paragraph  (a)  of
subdivision  4  as added by chapter 629 of the laws of 1996, are amended
to read as follows:
  (d) (i) The commissioner shall not register retail dealers OR  VENDING
MACHINES  or  such  registration  may  be  cancelled or suspended by the
commissioner upon notification that the applicant or retail  dealer,  OR
ANY  COMBINATION OF PERSONS OWNING DIRECTLY OR INDIRECTLY, IN THE AGGRE-
GATE, MORE THAN TEN PERCENT OF THE OWNERSHIP INTERESTS IN THE  APPLICANT
OR  RETAIL  DEALER  has  been  convicted  in  a criminal proceeding of a
violation of subdivision [five] THREE of section [260.20] 260.21 of  the
penal  law  or as directed by an enforcement officer pursuant to article
thirteen-F of the public health  law.  The  clerk  of  the  court  shall
promptly  report all criminal convictions under subdivision [five] THREE
of section [260.20] 260.21 of the penal law to the commissioner, togeth-
er with a direction to the commissioner to cancel such  registration  or
to suspend it for a specified period of time.

A. 4901                            13

  (II)  THE  COMMISSIONER  SHALL  NOT REGISTER RETAIL DEALERS OR VENDING
MACHINES OR SUCH REGISTRATION SHALL BE CANCELLED  OR  SUSPENDED  BY  THE
COMMISSIONER  UPON  NOTIFICATION THAT THE APPLICANT OR RETAIL DEALER, OR
ANY COMBINATION OF PERSONS OWNING DIRECTLY OR INDIRECTLY, IN THE  AGGRE-
GATE,  MORE THAN TEN PERCENT OF THE OWNERSHIP INTERESTS IN THE APPLICANT
OR RETAIL DEALER:
  (A) OWES FIVE HUNDRED DOLLARS OR MORE IN DELINQUENT CIGARETTE TAXES;
  (B) HAD A REGISTRATION ISSUED UNDER THIS SECTION OR A  LICENSE  ISSUED
UNDER SECTION FOUR HUNDRED EIGHTY OF THIS ARTICLE REVOKED BY THE COMMIS-
SIONER WITHIN THE PAST TWO YEARS; OR
  (C) HAS BEEN CONVICTED OF A CRIME RELATING TO COUNTERFEIT CIGARETTES.
  Anything  to  the  contrary in any law notwithstanding, retail dealers
shall have no right to a hearing under this chapter and  shall  have  no
right  to  commence  a  court action or proceeding or to any other legal
recourse against the commissioner with respect to any  action  taken  by
the  commissioner under this paragraph, provided nothing herein shall be
construed to deny retail dealers a hearing under article  thirteen-F  of
the  public  health  law or to prohibit retail dealers from commencing a
court action or proceeding against an enforcement officer as defined  in
section thirteen hundred ninety-nine-aa of the public health law.
  [(ii)]  (III) Anything to the contrary in any law notwithstanding, the
commissioner shall provide upon request to  an  enforcement  officer  as
defined  in section thirteen hundred ninety-nine-aa of the public health
law such registration information as is relevant and necessary  for  the
implementation of article thirteen-F of the public health law.
  3.  In  addition to any other penalty imposed by this chapter: (a) Any
retail dealer who violates the provisions of this section  shall,  after
due  notice  and  an opportunity for a hearing, for a first violation be
liable for a civil fine [not less than] OF five [hundred dollars but not
to exceed two] thousand dollars and for a second or subsequent violation
within three years following a prior finding of violation be liable  for
a  civil  fine  [not  less than one] OF TEN thousand dollars [but not to
exceed three thousand five hundred dollars]; or
  (b) Any person who owns or, if the owner is not the operator, then any
person who operates one or more vending  machines  through  which  ciga-
rettes  or  tobacco products are sold in this state and who violates the
provisions of this section shall, after due notice  and  an  opportunity
for  a  hearing,  for  a first violation be liable for a civil fine [not
less than seventy-five dollars but not to exceed two  hundred]  OF  FIVE
THOUSAND  dollars  and for a second or subsequent violation within three
years following a prior finding of violation be liable for a civil  fine
[not less than two hundred dollars but not to exceed six hundred] OF TEN
THOUSAND dollars.
  (a)  If  a  retail  dealer  possesses or sells unstamped or unlawfully
stamped packages of cigarettes, [or if a retail dealer is also  licensed
as  an  agent  pursuant  to  section  four  hundred  seventy-two  and it
possesses unlawfully stamped packages of cigarettes or  sells  unstamped
or  unlawfully stamped packages of cigarettes at retail,] (i) its regis-
tration shall be suspended for a period of not more than six months,  or
(ii) for a second such possession or sale within a period of five years,
its  registration  shall  be  suspended for a period of up to thirty-six
months, or (iii) for a third such possession or sale within a period  of
five  years,  its registration may be revoked for a period of up to five
years. A retail dealer registration shall be suspended or revoked pursu-
ant to this subdivision immediately upon such dealer's receipt of  writ-
ten  notice  of  suspension  or  revocation from the commissioner. [If a

A. 4901                            14

retail dealer sells cigarettes through more than one place  of  business
in  this state, the retail dealer registration shall not be suspended or
revoked pursuant to this subdivision, but the certificate  of  registra-
tion  issued  to  the  place  of  business,  cart, stand, truck or other
merchandising device where unstamped or  unlawfully  stamped  cigarettes
were  found  shall  be  suspended or cancelled for possession or sale of
unstamped or unlawfully stamped  packages  of  cigarettes,  as  if  such
certificate of registration were a retail dealer registration. A suspen-
sion  or  cancellation of a certificate of registration shall be treated
as if it were a suspension or revocation of a registration. If unstamped
or unlawfully stamped cigarettes are found in a  retail  dealer's  ware-
house,  the]  THE suspension or revocation of the retail dealer's regis-
tration pursuant to this subdivision shall be applicable to each  retail
place  of  business in this state through which such retail dealer sells
cigarettes. IF A RETAIL DEALER COMMITS ANY VIOLATION  OTHER  THAN  THOSE
DESCRIBED  IN  THIS  SUBDIVISION OR SUBDIVISION ONE OF THIS SECTION, THE
COMMISSIONER MAY SUSPEND OR REVOKE THE RETAIL DEALER'S REGISTRATION.
  S 14. Subdivision 5 of section 480-a of the tax law is REPEALED.
  S 15. Subparagraph (v) of paragraph (a) of subdivision 1 and paragraph
(b) of subdivision 2 of section 481 of the tax law, subparagraph (v)  of
paragraph  (a)  of subdivision 1 as amended by chapter 65 of the laws of
1985 and paragraph (b) of subdivision 2 as amended by chapter 61 of  the
laws of 1989, are amended, subdivision 4 is renumbered subdivision 9 and
five new subdivisions 4, 5, 6, 7 and 8 are added to read as follows:
  (v)  The  penalties  and  interest  provided for in this paragraph, IN
ADDITION TO ANY OTHER PENALTY IMPOSED BY THIS ARTICLE, shall  be  deter-
mined,  assessed,  collected  and  paid  in the same manner as the taxes
imposed by this article  and  shall  be  disposed  of  as  [hereinafter]
provided  IN  THIS  SUBDIVISION  with respect to moneys derived from the
tax. Interest under this paragraph shall be compounded daily.
  (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
THROUGH THIS STATE TO ANOTHER LOCATION UNDER A PROPER BILL OF LADING  OR
FREIGHT  BILL,  OR  STORING  TOBACCO PRODUCTS OR UNSTAMPED CIGARETTES ON
BEHALF OF A LICENSED AGENT, nor to any employee of such carrier or ware-
houseman acting within the scope of his OR HER 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.
  4. WHOEVER OMITS, NEGLECTS, OR REFUSES TO COMPLY WITH ANY DUTY IMPOSED
UPON HIM OR HER BY THIS ARTICLE, OR TO DO, OR CAUSE TO BE DONE,  ANY  OF
THE THINGS REQUIRED BY THIS ARTICLE, OR DOES ANYTHING PROHIBITED BY THIS
ARTICLE,  SHALL, IN ADDITION TO ANY OTHER PENALTY PROVIDED IN THIS ARTI-
CLE OR ARTICLE THIRTY-SEVEN OF THIS CHAPTER, BE LIABLE TO A  PENALTY  OF
FIVE  THOUSAND  DOLLARS OR FIVE TIMES THE RETAIL VALUE OF THE CIGARETTES
INVOLVED, WHICHEVER IS GREATER, TO BE RECOVERED, WITH COSTS OF SUIT,  IN
A CIVIL ACTION.
  5.  WHOEVER  FAILS  TO PAY ANY TAX IMPOSED BY THIS ARTICLE AT THE TIME
PRESCRIBED BY LAW OR REGULATIONS, SHALL, IN ADDITION TO ANY OTHER PENAL-
TY PROVIDED IN THIS ARTICLE, BE LIABLE TO A PENALTY OF  FIVE  TIMES  THE
TAX DUE BUT UNPAID.

A. 4901                            15

  6.  ALL CIGARETTES WHICH ARE HELD FOR SALE, DISTRIBUTION OR USE WITHIN
THE BORDERS OF THIS STATE IN VIOLATION OF THE REQUIREMENTS OF THIS ARTI-
CLE SHALL BE FORFEITED TO THE STATE.
  7.  (A)  WHOEVER,  WITH  INTENT TO DEFRAUD THIS STATE, FAILS TO COMPLY
WITH ANY REQUIREMENT OF THIS ARTICLE OR REGULATIONS PRESCRIBED  PURSUANT
TO  THIS  ARTICLE SHALL, FOR EACH SUCH OFFENSE, IN ADDITION TO ANY OTHER
PENALTY PROVIDED IN THIS ARTICLE OR ARTICLE THIRTY-SEVEN OF  THIS  CHAP-
TER,  BE  FINED  TEN THOUSAND DOLLARS OR BE IMPRISONED FOR NOT MORE THAN
FIVE YEARS, OR BOTH.
  (B) WHOEVER KNOWINGLY VIOLATES ANY PROVISION OF  THIS  ARTICLE  OR  OF
REGULATIONS  PRESCRIBED  PURSUANT  TO  THIS ARTICLE SHALL, FOR EACH SUCH
OFFENSE, IN ADDITION TO ANY OTHER PENALTY PROVIDED IN THIS  ARTICLE,  BE
FINED NOT MORE THAN FIVE THOUSAND DOLLARS OR FIVE TIMES THE RETAIL VALUE
OF THE CIGARETTES INVOLVED, WHICHEVER IS GREATER, OR IMPRISONED NOT MORE
THAN ONE YEAR, OR BOTH.
  8.  NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE SALE OR POSSESSION
FOR SALE OF COUNTERFEIT CIGARETTES BY A MANUFACTURER,  IMPORTER,  AGENT,
OR DEALER SHALL RESULT IN THE SEIZURE OF THE PRODUCT AND RELATED MACHIN-
ERY  BY  THE  COMMISSIONER  OR  ANY  LAW ENFORCEMENT AGENCY AND SHALL BE
PUNISHABLE AS FOLLOWS: (A) A FIRST VIOLATION WITH A  TOTAL  QUANTITY  OF
LESS THAN TWO CARTONS OF CIGARETTES SHALL BE PUNISHABLE BY A FINE OF ONE
THOUSAND  DOLLARS  OR  FIVE  TIMES  THE  RETAIL  VALUE OF THE CIGARETTES
INVOLVED, WHICHEVER IS GREATER,  OR  IMPRISONMENT  NOT  TO  EXCEED  FIVE
YEARS, OR BOTH.
  (B)  A  SUBSEQUENT  VIOLATION  WITH  A TOTAL QUANTITY OF LESS THAN TWO
CARTONS OF CIGARETTES SHALL BE PUNISHABLE BY A  FINE  OF  FIVE  THOUSAND
DOLLARS  OR  FIVE  TIMES  THE  RETAIL  VALUE OF THE CIGARETTES INVOLVED,
WHICHEVER IS GREATER, OR IMPRISONMENT NOT TO EXCEED FIVE YEARS, OR BOTH,
AND SHALL ALSO RESULT IN THE REVOCATION  BY  SUCH  COMMISSIONER  OF  THE
MANUFACTURER, IMPORTER, AGENT, OR DEALER LICENSE.
  (C)  A  FIRST  VIOLATION WITH A TOTAL QUANTITY OF TWO CARTONS OF CIGA-
RETTES OR MORE SHALL BE PUNISHABLE BY A FINE OF TWO THOUSAND DOLLARS  OR
FIVE  TIMES  THE  RETAIL  VALUE OF THE CIGARETTES INVOLVED, WHICHEVER IS
GREATER, OR IMPRISONMENT NOT TO EXCEED FIVE YEARS, OR BOTH.
  (D) A SUBSEQUENT VIOLATION WITH A QUANTITY OF  TWO  CARTONS  OF  CIGA-
RETTES  OR  MORE SHALL BE PUNISHABLE BY A FINE OF FIFTY THOUSAND DOLLARS
OR FIVE TIMES THE RETAIL VALUE OF THE CIGARETTES INVOLVED, WHICHEVER  IS
GREATER,  OR  IMPRISONMENT  NOT TO EXCEED FIVE YEARS, OR BOTH, AND SHALL
ALSO RESULT IN THE REVOCATION BY SUCH COMMISSIONER OF THE  MANUFACTURER,
IMPORTER, AGENT, OR DEALER LICENSE.
  FOR PURPOSES OF THIS SUBDIVISION, COUNTERFEIT CIGARETTES INCLUDE CIGA-
RETTES  THAT  HAVE  FALSE MANUFACTURING LABELS OR PACKAGES OF CIGARETTES
BEARING COUNTERFEIT TAX STAMPS. ANY COUNTERFEIT CIGARETTES SEIZED BY THE
COMMISSIONER SHALL BE DESTROYED.
  S 16. Subdivision (a) of section 1846 of the tax law,  as  amended  by
section  2  of  part  E of chapter 93 of the laws of 2002, is amended to
read as follows:
  (a) Whenever a police officer designated in section 1.20 of the crimi-
nal procedure law or a peace officer designated in subdivision  four  of
section  2.10 of such law, acting pursuant to his or her special duties,
shall discover any cigarettes subject to tax provided by article  twenty
of  this  chapter or by chapter thirteen of title eleven of the adminis-
trative code of the city of New York, and upon which  the  tax  has  not
been  paid or the stamps not affixed as required by such article or such
chapter thirteen, OR ANY CIGARETTES OTHERWISE BEING POSSESSED OR HELD IN
VIOLATION OF ARTICLE TWENTY OF THIS CHAPTER, they are hereby  authorized

A. 4901                            16

and empowered forthwith to seize and take possession of such cigarettes,
together  with  any vending machine or receptacle in which they are held
for sale. Such cigarettes, vending machine or  receptacle  seized  by  a
police officer or such peace officer shall be turned over to the commis-
sioner.  Such  seized  cigarettes,  vending  machine  or receptacle, not
including money contained in such vending machine or  receptacle,  shall
be  forfeited  to the state.   The commissioner may, within a reasonable
time thereafter, upon publication of a notice  to  such  effect  for  at
least  five  successive  days,  before  the  day of sale, in a newspaper
published or circulated in the county where the seizure was  made,  sell
such  forfeited cigarettes and vending machines or receptacles at public
sale and pay the proceeds into the state treasury to the credit  of  the
general  fund.  Cigarettes  so  seized and sold shall be sold only to an
agent under article twenty of this chapter and the notice of sale  shall
contain a provision to this effect.  Notwithstanding any other provision
of  this  section, the commissioner may enter into an agreement with any
city of this state which is authorized to impose a tax similar  to  that
imposed by article twenty of this chapter to provide for the disposition
between the state and any such city of the proceeds from any such sale.
  S  17. Section 1814 of the tax law, as added by chapter 65 of the laws
of 1985, the section heading, subdivisions (c), (g) and (h)  as  amended
and  subdivision  (j)  as added by chapter 61 of the laws of 1989, para-
graph 2 of subdivision (a) and paragraph 1 of subdivision (e) as amended
by chapter 508 of the laws of 2004, subdivisions (d) and (e) as  amended
by chapter 262 of the laws of 2000 and subdivision (k) as added by chap-
ter 190 of the laws of 1990, is amended to read as follows:
  S  1814.  Cigarette and tobacco products tax.--(a) Attempt to evade or
defeat tax.--(1) Any person who willfully  attempts  in  any  manner  to
evade or defeat any tax imposed by article twenty of this chapter or the
payment  thereof  shall, in addition to other penalties provided by law,
be guilty of a [misdemeanor] CLASS E FELONY.
  (2) Any person who willfully attempts in any manner to evade or defeat
the taxes imposed by article twenty of this chapter or  payment  thereof
on  (i)  ten thousand cigarettes or more (ii) twenty-two thousand cigars
or more, or (iii) four hundred forty pounds of tobacco or  more  or  has
previously  been convicted two or more times of a violation of paragraph
one of this subdivision shall be guilty of a class [E] D felony.
  (b) Willful failure to file a  return  or  report,  or  pay  tax.--Any
person  required  under  article twenty of this chapter to pay or make a
return or report, who willfully fails to  pay  such  tax  or  make  such
return or report, at the time or times so required, shall be guilty of a
[misdemeanor] CLASS E FELONY.
  (c)  Fraudulent  returns, reports, statements or other documents.--(1)
Any person who willfully makes and subscribes any return, report, state-
ment or other document which is required to be filed with  or  furnished
to the commissioner [of taxation and finance] or to any person, pursuant
to  article  twenty of this chapter, which he OR SHE does not believe to
be true and correct as to every material matter shall  be  guilty  of  a
[misdemeanor] CLASS D FELONY.
  (2) Any person who willfully delivers or discloses to the commissioner
[of  taxation  and finance] or to any person, pursuant to article twenty
of this chapter, any list, return, report, account, statement  or  other
document  known  by him OR HER to be fraudulent or to be false as to any
material matter shall be guilty of a [misdemeanor] CLASS D FELONY.
  (3) For purposes of this section, the omission by any  person  of  any
material  matter with intent to deceive shall constitute the delivery or

A. 4901                            17

disclosure of a document known by him OR HER to be fraudulent or  to  be
false as to any material matter.
  (d)  Any person, other than an agent licensed by the commissioner, who
possesses or transports for the purpose of sale any unstamped or  unlaw-
fully  stamped  packages of cigarettes subject to tax imposed by section
four hundred seventy-one of this chapter, or who  sells  or  offers  for
sale unstamped or unlawfully stamped packages of cigarettes in violation
of the provisions of article twenty of this chapter shall be guilty of a
[misdemeanor] CLASS E FELONY.  Any person who violates the provisions of
this  subdivision  after having previously been convicted of a violation
of this subdivision within the preceding five years shall be guilty of a
class [E] D felony.
  (e) (1) Any person, other than an agent licensed by the  commissioner,
who  willfully possesses or transports for the purpose of sale ten thou-
sand or more cigarettes subject to  the  tax  imposed  by  section  four
hundred  seventy-one  of  this  chapter  in  any unstamped or unlawfully
stamped packages or who willfully sells or offers for sale ten  thousand
or  more  cigarettes  in any unstamped or unlawfully stamped packages in
violation of article twenty of this chapter shall be guilty of  a  class
[E] D felony.
  (2)  Any person, other than an agent licensed by the commissioner, who
willfully possesses or transports for the purpose of sale  thirty  thou-
sand  or  more  cigarettes  subject  to  the tax imposed by section four
hundred seventy-one of this  chapter  in  any  unstamped  or  unlawfully
stamped  packages or who willfully sells or offers for sale thirty thou-
sand or more cigarettes in any unstamped or unlawfully stamped  packages
in  violation  of  article  twenty  of this chapter shall be guilty of a
class [D] C felony.
  (f) For the purposes of this section, the possession or transportation
within this state by any person, other than an agent, at any one time of
five thousand or more cigarettes  in  unstamped  or  unlawfully  stamped
packages   shall  be  presumptive  evidence  that  such  cigarettes  are
possessed or transported for the purpose of sale and are subject to  the
tax  imposed  by  section four hundred seventy-one of this chapter. With
respect to such possession or transportation any provisions  of  article
twenty  of  this  chapter providing for a time period during which a use
tax imposed by such article may  be  paid  on  unstamped  cigarettes  or
unlawfully  or  improperly stamped cigarettes or during which such ciga-
rettes may be returned to an agent shall not apply. The possession with-
in this state of more than  four  hundred  cigarettes  in  unstamped  or
unlawfully stamped packages by any person other than an agent at any one
time  shall  be presumptive evidence that such cigarettes are subject to
tax as provided by article twenty of this chapter.
  (g) 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
THROUGH THIS STATE TO ANOTHER LOCATION UNDER A PROPER BILL OF LADING  OR
FREIGHT  BILL, or [lawfully transporting or] storing tobacco products OR
UNSTAMPED CIGARETTES ON BEHALF OF A LICENSED AGENT, nor to any  employee
of  such  carrier  or warehouseman acting within the scope of his OR HER
employment, nor to public officers or employees in  the  performance  of
their  official  duties  requiring possession or control of unstamped or
unlawfully stamped packages of cigarettes or possession  or  control  of
tobacco products, nor to temporary incidental possession by employees or
agents  of persons lawfully entitled to possession, nor to persons whose

A. 4901                            18

possession is for the purpose of aiding police  officers  in  performing
their duties.
  (h)  Any willful act or omission, other than those described in subdi-
vision (a), (b), (c), (d), (e), (f), (g), (i) or (j) of this section, by
any person which constitutes a violation of  any  provision  of  article
twenty of this chapter shall constitute a [misdemeanor] CLASS E FELONY.
  (i)  Any  person who falsely or fraudulently makes, alters or counter-
feits any stamp prescribed by the [tax  commission]  COMMISSIONER  under
the  provisions of article twenty of this chapter, or causes or procures
to be falsely or fraudulently made, altered or  counterfeited  any  such
stamp,  or  knowingly and willfully utters, purchases, passes or tenders
as true any such false, altered or counterfeited stamp, or knowingly and
willfully possesses any cigarettes in packages bearing any  such  false,
altered  or  counterfeited stamp, and any person who knowingly and will-
fully makes, causes to be made, purchases or  receives  any  device  for
forging  or counterfeiting any stamp, prescribed by the [tax commission]
COMMISSIONER under the provisions of article twenty of this chapter,  or
who  knowingly  and willfully possesses any such device, shall be guilty
of a class [E] D felony. For the purposes of this subdivision, the words
"stamp prescribed by the [tax commission] COMMISSIONER" shall include  a
stamp,  impression  or imprint made by a metering machine, the design of
which has been approved by such [commission] COMMISSIONER.
  (j) (1) Any dealer, other than a distributor appointed by the  commis-
sioner  [of  taxation and finance] under article twenty of this chapter,
who shall knowingly transport or have in his OR HER custody,  possession
or under his OR HER control more than ten pounds of tobacco or more than
five  hundred  cigars  upon which the taxes imposed by article twenty of
this chapter have not been assumed or paid by a distributor appointed by
the commissioner [of taxation and finance] under article twenty of  this
chapter,  or  other  person treated as a distributor pursuant to section
four hundred seventy-one-d of this chapter, shall be guilty of a  misde-
meanor punishable by a fine of not more than five thousand dollars or by
a term of imprisonment not to exceed thirty days.
  (2)  Any person, other than a dealer or a distributor appointed by the
commissioner [of taxation and finance]  under  article  twenty  of  this
chapter,  who  shall  knowingly transport or have in his OR HER custody,
possession or under his OR HER  control  more  than  fifteen  pounds  of
tobacco  or  more  than  seven hundred fifty cigars upon which the taxes
imposed by article twenty of this chapter have not been assumed or  paid
by a distributor appointed by the commissioner [of taxation and finance]
under  article  twenty  of  this  chapter,  or other person treated as a
distributor pursuant to section four hundred seventy-one-d of this chap-
ter shall be guilty of a misdemeanor punishable by a fine  of  not  more
than  five  thousand  dollars or by a term of imprisonment not to exceed
thirty days.
  (3) Any person, other than a distributor appointed by the commissioner
[of taxation and finance] under article  twenty  of  this  chapter,  who
shall  knowingly  transport or have in his OR HER custody, possession or
under his OR HER control twenty-five hundred or more cigars or fifty  or
more pounds of tobacco upon which the taxes imposed by article twenty of
this chapter have not been assumed or paid by a distributor appointed by
the  commissioner [of taxation and finance] under article twenty of this
chapter, or other person treated as a distributor  pursuant  to  section
four  hundred  seventy-one-d of this chapter shall be guilty of a misde-
meanor. Provided further, that any person who has twice  been  convicted
under  this  subdivision  shall  be  guilty  of a class E felony for any

A. 4901                            19

subsequent violation of this section, regardless of the amount of tobac-
co products involved in such violation.
  (4)  For  purposes  of  this  subdivision, such person shall knowingly
transport or have in his OR HER custody, possession or under his OR  HER
control  tobacco  or cigars on which such taxes have not been assumed or
paid by a distributor appointed by the  commissioner  [of  taxation  and
finance]  where  such person has knowledge of the requirement of the tax
on tobacco products and, where to his OR HER knowledge, such taxes  have
not  been  assumed  or  paid  on  such tobacco products by a distributor
appointed by the commissioner [of taxation and finance].
  (k) Any person who falsely or fraudulently makes, alters  or  counter-
feits   a   registration  certificate  or  sticker  required  under  the
provisions of section four hundred eighty-a of this chapter,  or  causes
or procures to be falsely or fraudulently made, altered or counterfeited
any such registration certificate or sticker, or knowingly and willfully
utters,  purchases, passes or tenders as true any such false, altered or
counterfeited registration certificate or sticker, and  any  person  who
knowingly  and willfully makes, causes to be made, purchases or receives
any device for forging or counterfeiting any registration certificate or
sticker required under the provisions of such section, or who  knowingly
and  willfully  possesses any such device, shall be guilty of a class [B
misdemeanor] E FELONY.
  S 18. Severability. If any provision of this act or the application of
any provision of this act to any person or circumstance is  held  to  be
invalid, the remainder of this act and the application of the provisions
of  this  act  to any other person or circumstance shall not be affected
thereby and shall continue to be enforced to the fullest  extent  possi-
ble.
  S  19.  This act shall take effect on the ninetieth day after it shall
have become a law.