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Tobacco Retailing
- Tax Evasion - Motor Fuels
- Beverage Retailing - Store
Operations - Positions
Positions: Small
Business Fee Increases
Business
License and Registration Fee Increases in the Proposed 2002-2003 State
Budget
Convenience stores
statewide have lost over $1 Billion in gross sales of tobacco, gasoline,
and other products as a direct result of the tax evasion stampede triggered
by the doubling of the state cigarette tax in March 2000.
Many mom-and-pop retailers,
who typically relied on the responsible sale of legal tobacco products
to adult customers for one-third of their merchandise sales, have seen
cigarette volume plummet 30% to 60% - not because people quit smoking
but because smokers shifted their purchases to Native American outlets
(no tax), the Internet (no tax), and border states like Pennsylvania (much
lower tax) to avoid paying the tax-inflated New York price.
On April 3rd, 2002,
under the "health care" legislation recently passed by the Legislature,
the cigarette tax will climb another 39 cents per pack. This will widen
the price differential by 35%, intensifying the tax evasion phenomenon
and draining more customers away from law-abiding, tax-collecting neighborhood
stores.
Rather than providing
relief to small business owners whose livelihoods are imperiled by this
inane tax policy, the Governor's proposed budget recommends socking them
with fee increases and cash-flow torpedoes, including:
- Increasing the
food processing license fee convenience stores pay the state Department
of Agriculture and Markets.
- Doubling the fees
that convenience stores pay the state Department of Environmental Conservation
to register their underground fuel storage tanks.
- Charging 15% more
for a State Liquor Authority license to sell beer and wine coolers for
off-premise consumption.
- "Spinning
up" the formula for computing pre-paid sales tax on cigarettes.
- Lowering the threshold
at which retailers must electronically remit sales tax receipts.
Everyone appreciates
the difficulty of trying to balance the state budget in these economic
times. But not everyone seems to appreciate the difficulty of operating
a small business in these economic times when the state government you
pay taxes to, and collect taxes for, is chasing away your customers
to unlicensed, untaxed, unregulated outlets.
If New York State needs our industry to generate more revenue for the
state budget, it must give us the chance to recapture the sales volume
necessary to cover the added cost by revising its tax policy to restore
a fair marketplace.
Otherwise, the members of the New York Association of Convenience Stores
stand united in respectfully but vehemently opposing any fee hike, spin-up,
formula change or other revenue enhancement gimmick that will further
weaken neighborhood retail businesses.
March 15, 2002
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