N.Y. Budget Rolls Back Tobacco Fee for C-Stores

ALBANY, N.Y. -- While most New Yorkers are cheering a state budget that is coming in on time, convenience stores across the Empire State are cheering an agreement that sets the tobacco fee at $300 per store per year.

The specter of sky-high fees has loomed over the industry since a fee hike was enacted in 2009. That increase would have seen tobacco fees rise from $100 per store per year to $1,000, $2,500 or $5,000 depending on total gross sales, according to the New York Association of Convenience Stores (NYACS). Faced with the large payout, NYACS, the Long Island Gasoline Retailers Association, the New York State Association of Service Stations and Repair Shops and the United 7-Eleven Franchise Owners of Long Island and New York launched a legal challenge and obtained a court order freezing the fee at $100 pending a final decision.

However, in a move to ensure a reasonable fee, NYACS and its allies negotiated with the state to set the tobacco fee at $300 per store per year, which is included in the 2011-2012 state budget. The New York Legislature passed the budget earlier Thursday morning.

Under the agreement, the tobacco fee is retroactive to 2010. As a result, convenience stores that paid $100 in 2010 and 2011 will now have to pay $200 more for each of those two years. The $300 payment for 2012 is due Sept. 20.

"The $300-a-year compromise may not be the perfect solution, but it gives the majority of our retail members the chance to remain in the all-important tobacco category without paying a king's ransom every year," said NYACS president James Calvin.

Retailers who paid the higher fee in September 2009 for their 2010 renewal application, before the temporary freeze went into effect, will receive a refund or credit for the state tax department.