S T A T E   O F   N E W   Y O R K
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                                  1834

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                            February 9, 2009
                               ___________

Introduced  by  Sen.  KLEIN  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

AN ACT to amend the tax law, in relation to collecting the tax on  ciga-
  rettes;  and  to  repeal  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,
subdivision 8 as amended by section 1 of part K of  chapter  61  of  the
laws of 2005, subdivisions 9 and 11 as amended by chapter 61 of the laws
of 1989, are amended and five new subdivisions 20, 21, 22, 23 and 24 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 deal-
ers  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.
  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.
                                                           LBD02885-01-9
              

S. 1834                             2

  20.  "INDIAN TRIBAL ENTITY" MEANS A FEDERALLY RECOGNIZED INDIAN TRIBE,
TRIBAL ENTITY, OR ANY OTHER PERSON DOING BUSINESS AS A DEALER  OF  CIGA-
RETTES  ON  THE  INDIAN COUNTRY, AS DEFINED IN 18 U.S.C. S 1151, OF SUCH
TRIBE WITHIN THIS STATE.
  21.  "MANUFACTURER"  MEANS  ANY  PERSON  WHO MANUFACTURES, FABRICATES,
ASSEMBLES, PROCESSES, OR LABELS A FINISHED CIGARETTE.
  22. "IMPORTER" MEANS ANY PERSON WHO IMPORTS INTO  THE  UNITED  STATES,
EITHER DIRECTLY OR INDIRECTLY, A FINISHED CIGARETTE FOR SALE OR DISTRIB-
UTION.
  23.   "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-F OF THIS ARTICLE.
  24. "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  shall  collect the tax from the
purchaser or consumer. Except as [hereinafter] provided IN THIS SUBDIVI-
SION, 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  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 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 receiving 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-

S. 1834                             3

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
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.  The tax law is amended by adding a new section 471-f to read as
follows:
  S 471-F. 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 COMMISSION SHALL PERIODICALLY REBATE TO ANY INDIAN TRIBAL ENTI-
TY 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-F
OF  THIS  ARTICLE,  and  may  from time to time and as often as he 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

S. 1834                             4

chapter. The commissioner shall make provisions for  the  sale  of  such
stamps at such places and at such times as he may deem necessary and may
license  agents for such purpose. The commissioner may license WHOLESALE
dealers  in cigarettes, who maintain separate warehousing 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 importers, export-
ers and manufacturers of cigarettes, and other persons within or without
the state as] OR ARE THEMSELVES ALSO LICENSED AS MANUFACTURERS,  IMPORT-
ERS  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 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, including the
procedure for suspension, revocation, refusal to license and  for  hear-
ings, 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  services  and
expenses  as  such  agent  in  [selling or] affixing such stamps, and to
retain out of the moneys to be paid by him 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 sched-
ule 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 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  superinten-
dent  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 commissioner 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 secu-
rities 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  liti-
gate  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

S. 1834                             5

TO REDUCED STATE TAX UNDER  SUBDIVISION  TWO  OF  SECTION  FOUR  HUNDRED
SEVENTY-ONE-F 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
OR DISTRIBUTION TO CONSUMERS NOT SUBJECT TO STATE  TAX  UNDER  PARAGRAPH
(A)  OF  SUBDIVISION  ONE  OF SECTION FOUR HUNDRED SEVENTY-ONE-F 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-F 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 place of business mark
in ink on each unopened box, carton or other  container  of  such  ciga-
rettes  the  word  "received"  and the year, month, day and hour of such
receipt, and shall affix his 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.

S. 1834                             6

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
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 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

S. 1834                             7

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
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 deliv-
ered within the state as may be required by the commissioner  [of  taxa-
tion  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 stamping of ciga-
rettes or the sale and delivery of cigarettes or tobacco products  taxa-
ble  under  this  article, as well as the stock of cigarettes or tobacco
products in any such premises or vehicle. To verify the accuracy 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. SUCH 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
GOVERNMENT OR OTHER STATES. PUBLIC ACCESS TO REPORTS SUBMITTED BY LICEN-
SEES  SHALL BE PROVIDED UNDER THE PROCEDURES ESTABLISHED BY THE NEW YORK
FREEDOM OF INFORMATION LAW. IN NO CASE, HOWEVER, SHALL INFORMATION ABOUT
QUANTITIES OF CIGARETTES BY BRAND STYLE BE RELEASED TO ANYONE OTHER THAN

S. 1834                             8

THE COMMISSIONER, THE UNITED STATES SECRETARY OF THE TREASURY, OR  OTHER
STATE  AND FEDERAL LAW ENFORCEMENT OFFICIALS WITH WHOM SUCH COMMISSIONER
HAS ELECTED TO SHARE REPORTS AND RECORDS REQUIRED BY THIS ARTICLE.
  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-

S. 1834                             9

RETTES IN VIOLATION OF THIS ARTICLE, SUCH COMMISSIONER, SUCH  AGENT,  OR
SUCH  POLICE OR PEACE OFFICER, IS AUTHORIZED TO STOP SUCH VEHICLE AND TO
INSPECT THE SAME FOR CONTRABAND CIGARETTES.
  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 (extending the period for determi-
nation of tax imposed by this article) is made within the two-year peri-
od  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,

S. 1834                            10

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
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 article twenty or article twenty-A of this
chapter, or the regulations of [the] SUCH 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  TAX  COMMISSION;  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.

S. 1834                            11

  [(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-
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 SECTION 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 commission
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 cancella-
tion  or  suspension  or of proposed refusal to license must be given to

S. 1834                            12

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 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, suspension 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 within
ninety  days  after  the  giving  of  such  notice.  Where  a license is
cancelled or suspended prior to a hearing, the cancellation  or  suspen-
sion 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 time-
ly  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] COMMISSIONER 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 TAX COMMISSION  SHALL  CREATE
AND  MAINTAIN  A  WEB SITE 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
REGISTRATIONS  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-

S. 1834                            13

er with a direction to the commissioner to cancel such  registration  or
to suspend it for a specified period of time.
  (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-

S. 1834                            14

ant to this subdivision immediately upon such dealer's receipt of  writ-
ten  notice  of  suspension  or  revocation from the commissioner. [If a
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 and five new subdivisions 5, 6, 7, 8 and 9 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 employment, nor to public  offi-
cers  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.
  5. 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.
  6. 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-

S. 1834                            15

TY  PROVIDED  IN  THIS ARTICLE, BE LIABLE TO A PENALTY OF FIVE TIMES THE
TAX DUE BUT UNPAID.
  7.  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.
  8. (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.
  9. 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 added 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

S. 1834                            16

chapter thirteen, OR ANY CIGARETTES OTHERWISE BEING POSSESSED OR HELD IN
VIOLATION  OF ARTICLE TWENTY OF THIS CHAPTER, they are hereby authorized
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 does not believe to be  true
and  correct as to every material matter shall be guilty of a [misdemea-
nor] 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 to be fraudulent or to be false as to any material
matter shall be guilty of a [misdemeanor] CLASS D FELONY.

S. 1834                            17

  (3) For purposes of this section, the omission by any  person  of  any
material  matter with intent to deceive shall constitute the delivery or
disclosure of a document known by him 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 employ-
ment, nor to public officers or employees in the  performance  of  their
official  duties  requiring possession or control of unstamped or unlaw-
fully stamped packages of cigarettes or possession or control of tobacco
products, nor to temporary incidental possession by employees or  agents

S. 1834                            18

of  persons  lawfully  entitled  to  possession,  nor  to  persons whose
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  custody,  possession  or
under  his  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  custody,
possession or under his 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 custody,  possession  or  under
his  control  twenty-five hundred or more cigars or fifty or more pounds
of tobacco upon which the taxes imposed by article twenty of this  chap-
ter  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

S. 1834                            19

under this subdivision shall be guilty of  a  class  E  felony  for  any
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 custody, possession or under his control tobac-
co 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 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.