Retailers' Fight Against N.Y. Cigar Tax Shift Pays Off

Press enter to search
Close search
Open Menu

Retailers' Fight Against N.Y. Cigar Tax Shift Pays Off

04/13/2017

ALBANY, N.Y. — A proposed shift in the New York State tax on cigars did not make the final budget, a move the New York Association of Convenience Stores (NYACS) is applauding.

NYACS President Jim Calvin commended his retail and distributor members as well as the Cigar Association of America for successfully defeating the change initially placed on the table by Gov. Andrew Cuomo.

Cuomo had proposed to switch the tax from 75 percent of wholesale value to 45 cents a stick, as CSNews Online previously reported.

This shift, according to NYACS, would have doubled the price of two-packs of value cigars sold in convenience stores while giving luxury cigars a tax break. It also would have driven c-store customers to neighboring states, like Pennsylvania which has no state excise tax, and Native American outlets across New York. 

The final budget, which was approved by the state legislature and Cuomo, also excluded a proposed new excise tax on electronic cigarettes and liquid nicotine. While the 10 cents per milliliter would have been "relatively modest," NYACS opposed it on grounds that once a tax like this is established, Albany would continue to raise the levy in subsequent years, according to the association. 

Also omitted were additional restrictions on marketing and use of vaping products the governor had proposed.

However, NYACS pointed out the new budget does include a new 911 surcharge that convenience store operators will have to collect on prepaid wireless phone cards — a surcharge NYACS opposed — although "it was modified to lessen the administrative burden on retailers."

Under his proposal, Cuomo pushed for a two-tiered state surcharge of 60 cents on transactions under $30, and $1.20 on transactions of $30 or more, "almost impossible for cash registers to process," NYACS said. The final version combined the two, setting the surcharge at 90 cents per transaction, and allows counties and New York City to levy their own, additional surcharge of up to 30 cents per transaction.

In addition, Cuomo wanted retailers to remit the state revenue to the state Department of Taxation and Finance quarterly, but remit the city/county revenue directly to the city or county monthly, a move NYACS called "an administrative nightmare for retailers."

The final version directs retailers to remit both to the state tax department on a quarterly basis. It also allows stores to retain an administrative fee of 3 percent of the state and local surcharge they collect.