Tobacco Taxes Anger New York Retailers
ALBANY
Most cigarette retailers know the drill. Within 24 hours of receiving a shipment from a wholesaler, they're supposed to check each pack for the heat-stamped seal proving the state's $1.11 cigarette tax has been paid.
Spot inspections by officials with the state Department of Tax and Finance have been known to result in the confiscation of unstamped packs and at least temporary restrictions on tobacco sales, according to the New York Business Review.
But as Richard Rzeszotarski of Mohawk Dairy in Amsterdam, N.Y. found out, retailers can also face jail time. After an inspection last month he was left with two appearance tickets, both alleging misdemeanor violations of the state's tax law.
"The state is getting ridiculous -- it's like they're picking on retailers for selling tobacco," said Rzeszotarski, who has receipts from the wholesaler showing he paid taxes on the disputed cigarettes. "If they'd come in here with a gun demanding $100 from me once a month, that would be more honest."
Rzeszotarski is among a growing number of retailers who claim new laws and stricter enforcement of existing regulations make it not just difficult, but risky, to sell cigarettes. State officials, on the other hand, contend they're just guarding against illegal sales.
"We have lots of cases where it turns out that retailers are going and getting cigarettes in other states to avoid the tax," Michael Bucci, a spokesman for the state Department of Tax and Finance, told the Business Review. "Traditionally spot checks of retailers ensure they aren't evading the tax or using counterfeit stamps."
Jim Calvin of the New York State Association of Convenience Stores (NYACS) said members throughout the state have reported a sharp increase in all types of tobacco inspections over the last one and a half years.
"It's not just tax stamp cases, it's the sting operations the state runs using undercover minors to buy cigarettes and nab mom-and-pop grocers," Calvin said. "Even when a retailer has trained their staff to ask for identification, they're liable for fines and can lose their licenses to sell tobacco and lottery tickets if clerks don't follow through."
More than 25,000 tobacco inspections were conducted on convenience stores and grocers throughout the state in 2000, according to Calvin, who said that at the same time, Internet and Native American retailers do not pay state taxes and aren't a target of state enforcers.
"Basically, retailers are being held to a standard of perfection by a system of enforcement that falls considerably short of that standard," Calvin said.
NYACS is lobbying state legislators for changes in the law to make clerks, cashiers and underage smokers as accountable as retailers for illegal sales. It's also pushing for the law to distinguish between willfully illegal sales and those that occur despite the retailer's voluntary safeguards.
In Rzeszotarski's case, he contends all of the necessary safeguards were in place. Cigarettes are in a locked case and clerks are instructed to recheck each pack for tax stamps before a sale. During the most recent state inspection, the 3.8 cartons found without stamps -- out of 297 in the store -- were unstamped because of a machine failure, according to the wholesaler.
Most cigarette retailers know the drill. Within 24 hours of receiving a shipment from a wholesaler, they're supposed to check each pack for the heat-stamped seal proving the state's $1.11 cigarette tax has been paid.
Spot inspections by officials with the state Department of Tax and Finance have been known to result in the confiscation of unstamped packs and at least temporary restrictions on tobacco sales, according to the New York Business Review.
But as Richard Rzeszotarski of Mohawk Dairy in Amsterdam, N.Y. found out, retailers can also face jail time. After an inspection last month he was left with two appearance tickets, both alleging misdemeanor violations of the state's tax law.
"The state is getting ridiculous -- it's like they're picking on retailers for selling tobacco," said Rzeszotarski, who has receipts from the wholesaler showing he paid taxes on the disputed cigarettes. "If they'd come in here with a gun demanding $100 from me once a month, that would be more honest."
Rzeszotarski is among a growing number of retailers who claim new laws and stricter enforcement of existing regulations make it not just difficult, but risky, to sell cigarettes. State officials, on the other hand, contend they're just guarding against illegal sales.
"We have lots of cases where it turns out that retailers are going and getting cigarettes in other states to avoid the tax," Michael Bucci, a spokesman for the state Department of Tax and Finance, told the Business Review. "Traditionally spot checks of retailers ensure they aren't evading the tax or using counterfeit stamps."
Jim Calvin of the New York State Association of Convenience Stores (NYACS) said members throughout the state have reported a sharp increase in all types of tobacco inspections over the last one and a half years.
"It's not just tax stamp cases, it's the sting operations the state runs using undercover minors to buy cigarettes and nab mom-and-pop grocers," Calvin said. "Even when a retailer has trained their staff to ask for identification, they're liable for fines and can lose their licenses to sell tobacco and lottery tickets if clerks don't follow through."
More than 25,000 tobacco inspections were conducted on convenience stores and grocers throughout the state in 2000, according to Calvin, who said that at the same time, Internet and Native American retailers do not pay state taxes and aren't a target of state enforcers.
"Basically, retailers are being held to a standard of perfection by a system of enforcement that falls considerably short of that standard," Calvin said.
NYACS is lobbying state legislators for changes in the law to make clerks, cashiers and underage smokers as accountable as retailers for illegal sales. It's also pushing for the law to distinguish between willfully illegal sales and those that occur despite the retailer's voluntary safeguards.
In Rzeszotarski's case, he contends all of the necessary safeguards were in place. Cigarettes are in a locked case and clerks are instructed to recheck each pack for tax stamps before a sale. During the most recent state inspection, the 3.8 cartons found without stamps -- out of 297 in the store -- were unstamped because of a machine failure, according to the wholesaler.