§ 481. Penalties and interest. 1. (a)(i)(A) An agent or distributor or
other person treated as a distributor pursuant to section four hundred
seventy-one-d who or which fails to file a return or to pay any tax
within the time required by or pursuant to this article (determined with
regard to any extension of time for filing or paying) shall be subject
to a penalty of ten per centum of the amount of tax determined to be due
as provided in this article plus one per centum of such amount for each
month or fraction thereof during which such failure continues after the
expiration of the first month after such return was required to be filed
or such tax became due, not exceeding thirty per centum in the
aggregate.

(B) If a tax on cigarettes or on tobacco products under this article
is not paid when due by any other person, the person liable for the
payment of such tax shall be subject to a penalty of fifty per centum of
the amount of such tax determined to be due as provided in this article
plus one per centum of such amount for each month or fraction thereof
during which such failure to pay continues after the expiration of the
first month after such tax became due.

(C) In the case of a failure to file such return within sixty days of
the date prescribed for filing of such return by or pursuant to this
article (determined with regard to any extension of time for filing),
the penalty imposed by this paragraph shall not be less than the lesser
of one hundred dollars or one hundred per centum of the amount required
to be shown as tax on such return. For the purpose of the preceding
sentence, the amount of tax required to be shown on the return shall be
reduced by the amount of any part of the tax which is paid on or before
the date prescribed for payment of the tax and by the amount of any
credit against the tax which may be claimed upon the return.

(ii) If any amount of tax is not paid on or before the last date
prescribed in this article for payment, interest on such amount at the
underpayment rate set by the commissioner of taxation and finance
pursuant to subdivision twenty-sixth of section one hundred seventy-one
of this chapter shall be paid for the period from such last date to the
date paid, whether or not any extension of time for payment was granted.
Interest under this subparagraph shall not be paid if the amount thereof
is less than one dollar.

(iii) If the tax commission determines that such failure or delay was
due to reasonable cause and not due to willful neglect, it shall remit
all or part of such penalty. The tax commission shall promulgate rules
and regulations as to what constitutes reasonable cause.

(iv) If the failure to pay any tax within the time required by or
pursuant to this article is due to fraud, in lieu of the penalties and
interest provided for in subparagraphs (i) and (ii) of this paragraph,
there shall be added to the tax (A) a penalty of two times the amount of
tax due, plus (B) interest on such unpaid tax at the underpayment rate
set by the commissioner of taxation and finance pursuant to subdivision
twenty-sixth of section one hundred seventy-one of this chapter for the
period beginning on the last day prescribed by this article for the
payment of such tax (determined without regard to any extension of time
for paying) and ending on the day on which such tax is paid.

(v) The penalties and interest provided for in this paragraph shall be
determined, assessed, collected and paid in the same manner as the taxes
imposed by this article and shall be disposed of as hereinafter provided
with respect to moneys derived from the tax. Interest under this
paragraph shall be compounded daily.

(b) (i) In addition to any other penalty imposed by this article, the
commissioner may (A) impose a penalty of not more than six hundred
dollars for each two hundred cigarettes, or fraction thereof, in excess
of one thousand cigarettes in unstamped or unlawfully stamped packages
in the possession or under the control of any person or (B) impose a
penalty of not more than two hundred dollars for each ten unaffixed
false, altered or counterfeit cigarette tax stamps, imprints or
impressions, or fraction thereof, in the possession or under the control
of any person. In addition, the commissioner may impose a penalty of not
more than seventy-five dollars for each fifty cigars or one pound of
tobacco, or fraction thereof, in excess of two hundred fifty cigars or
five pounds of tobacco in the possession or under the control of any
person and a penalty of not more than one hundred fifty dollars for each
fifty cigars or pound of tobacco, or fraction thereof, in excess of five
hundred cigars or ten pounds of tobacco in the possession or under the
control of any person, with respect to which the tobacco products tax
has not been paid or assumed by a distributor or tobacco products
dealer; provided, however, that any such penalty imposed shall not
exceed seven thousand five hundred dollars in the aggregate. The
commissioner may impose a penalty of not more than seventy-five dollars
for each fifty cigars or one pound of tobacco, or fraction thereof, in
excess of fifty cigars or one pound of tobacco in the possession or
under the control of any tobacco products dealer or distributor
appointed by the commissioner, and a penalty of not more than one
hundred fifty dollars for each fifty cigars or pound of tobacco, or
fraction thereof, in excess of two hundred fifty cigars or five pounds
of tobacco in the possession or under the control of any such dealer or
distributor, with respect to which the tobacco products tax has not been
paid or assumed by a distributor or a tobacco products dealer; provided,
however, that any such penalty imposed shall not exceed fifteen thousand
dollars in the aggregate.

(ii) The penalties imposed by this subparagraph may be imposed by the
commissioner in addition to any other penalty imposed by this article,
but in lieu of the penalties imposed by subparagraph (i) of this
paragraph:

(A)(I)(1) not less than thirty dollars but not more than two hundred
dollars for each two hundred cigarettes, or fraction thereof, in excess
of one thousand cigarettes but less than or equal to five thousand
cigarettes in unstamped or unlawfully stamped packages knowingly in the
possession or knowingly under the control of any person or (2) not less
than thirty dollars but not more than two hundred dollars for each ten
unaffixed false, altered or counterfeit cigarette tax stamps, imprints
or impressions, or fraction thereof, less than or equal to two hundred
fifty unaffixed false, altered or counterfeit cigarette tax stamps,
imprints or impressions, knowingly in the possession or knowing under
the control of any person;

(II)(1) not less than seventy-five dollars but not more than two
hundred dollars for each two hundred cigarettes, or fraction thereof, in
excess of five thousand cigarettes but less than or equal to twenty
thousand cigarettes in unstamped or unlawfully stamped packages
knowingly in the possession or knowingly under the control of any person
or (2) not less than seventy-five dollars but not more than two hundred
dollars for each ten unaffixed false, altered or counterfeit cigarette
tax stamps, imprints or impressions, or fraction thereof, in excess of
two hundred fifty unaffixed false, altered or counterfeit cigarette tax
stamps, imprints or impressions but less than or equal to one thousand
unaffixed false, altered or counterfeit cigarette tax stamps, imprints
or impressions, knowingly in the possession or knowingly under the
control of any person; and

(III)(1) not less than one hundred dollars but not more than two
hundred dollars for each two hundred cigarettes, or fraction thereof, in
excess of twenty thousand cigarettes in unstamped or unlawfully stamped
packages, knowingly in the possession or knowingly under the control of
any person or (2) not less than one hundred dollars but not more than
two hundred dollars for each ten unaffixed false, altered or counterfeit
cigarette tax stamps, imprints or impressions, or fraction thereof, in
excess of one thousand unaffixed false, altered or counterfeit cigarette
tax stamps, imprints or impressions, knowingly in the possession or
knowingly under the control of any person.

(B)(I) not less than twenty-five dollars but not more than one hundred
dollars for each fifty cigars or one pound of tobacco, or fraction
thereof, in excess of two hundred fifty cigars or five pounds of tobacco
knowingly in the possession or knowingly under the control of any
person, with respect to which the tobacco products tax has not been paid
or assumed by a distributor or tobacco products dealer; and

(II) not less than fifty dollars but not more than two hundred dollars
for each fifty cigars or pound of tobacco, or fraction thereof, in
excess of five hundred cigars or ten pounds of tobacco knowingly in the
possession or knowingly under the control of any person, with respect to
which the tobacco products tax has not been paid or assumed by a
distributor or tobacco products dealer; provided, however, that any such
penalty imposed under this clause shall not exceed ten thousand dollars
in the aggregate.

(C)(I) not less than twenty-five dollars but not more than one hundred
dollars for each fifty cigars or one pound of tobacco, or fraction
thereof, in excess of fifty cigars or one pound of tobacco knowingly in
the possession or knowingly under the control of any person, with
respect to which the tobacco products tax has not been paid or assumed
by a distributor or tobacco products dealer; and

(II) not less than fifty dollars but not more than two hundred dollars
for each fifty cigars or pound of tobacco, or fraction thereof, in
excess of two hundred fifty cigars or five pounds of tobacco knowingly
in the possession or knowingly under the control of any person, with
respect to which the tobacco products tax has not been paid or assumed
by a distributor or a tobacco products dealer; provided, however, that
any such penalty imposed under this clause shall not exceed twenty
thousand dollars in the aggregate.

(iii) Any penalty provided for in this paragraph shall be determined
as provided in section four hundred seventy-eight of this chapter, and
may be reviewed only pursuant to such section. Such penalty shall be
collected in the same manner as the taxes imposed by this article. The
commissioner in the commissioner's discretion, may remit all or part of
such penalty. Such penalty shall be paid to the department and disposed
of as hereinafter provided with respect to moneys derived from the tax.

(c) In addition to any other penalties that may be imposed by law, the
commissioner may impose a civil penalty not to exceed five thousand
dollars against any tobacco product manufacturer or cigarette tax agent
who violates the provisions of section four hundred eighty-b of this
article, including but not limited to the filing of a false
certification, and may seek to suspend or cancel any license,
registration or appointment which has been issued to such person
pursuant to this chapter.

(d) In addition to any other penalties that may be imposed by law, the
commissioner may impose a civil penalty not to exceed five thousand
dollars against any tobacco product manufacturer or distributor who
violates the provisions of section four hundred eighty-c of this
article, including but not limited to the filing of a false
certification, and may seek to suspend or cancel any license,
registration or appointment that has been issued to the tobacco product
manufacturer or distributor under this chapter.

2. (a) The possession within this state of more than four hundred
cigarettes in unstamped or unlawfully stamped packages or more than two
hundred fifty cigars, or more than five pounds of tobacco other than
roll-your-own tobacco, or more than thirty-six ounces of roll-your-own
tobacco by any person other than an agent or distributor, as the case
may be, at any one time shall be presumptive evidence that such
cigarettes or tobacco products are subject to tax as provided by this
article.

(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, nor
to any employee of such carrier or warehouseman acting within the scope
of his 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.

3. For purposes of this chapter, the certificate of the commissioner
of taxation and finance to the effect that a tax or fee imposed by this
article has not been paid, that a return required by or under the
provisions of this article has not been filed, or that information has
not been supplied, as required by or under the provisions of this
article, or that a bond or other security required by or pursuant to the
provisions of this article has not been filed, or that books, accounts,
records, memoranda, documents or papers have not been supplied as
required by or pursuant to the authority of this article, or that a
retail dealer or vending machine owner or operator is not currently or
validly registered as required by this article shall be prima facie
evidence that such tax or fee has not been paid, such return not filed,
such information not supplied, such bond or other security not filed,
that such books, accounts, records, memoranda, documents or papers have
not been supplied, or that such retail dealer or vending machine owner
or operator is not currently or validly registered.

4. Cross-reference: For criminal penalties, see article thirty-seven
of this chapter.