Tobacco Retailing - Tax Evasion - Motor Fuels - Beverage Retailing - Store Operations - Positions

2008 NYACS Legislative and Regulatory Agenda

NYACS Will Actively Support…

• Full and fair tax collection on cigarettes and motor fuel

The Spitzer administration’s failure to enforce the March 1, 2006 state law mandating collection of taxes on Indian sales of tobacco and motor fuel to non-Indian New Yorkers is inexcusable, especially in light of his public promises to enforce it. The casualties for non-Indian retailers, state and local tax revenues, and anti-smoking efforts are mounting. NYACS will pursue every legal, legislative and other tool available to attain the level playing field the law requires and our members deserve. Negotiated settlements that fall short of full and fair tax collection are unacceptable. The State must also more aggressively enforce its laws restricting untaxed sales of cigarettes via Internet or mail order.

• Higher lottery commissions to reflect merchant’s higher costs

Despite escalating labor, energy, insurance, taxes and other costs, the commission rate paid to lottery retailers has remained as 6% for more than 30 years. NYACS advocates increasing the commission to 8% to reflect the merchant's sharply higher costs of selling lottery games. By reallocating administrative resources, this increase can be achieved without impacting the net amount New York Lottery contributes to education.

• Reform of CMSA minimum markup requirements

For 20 years, the Cigarette Marketing Standards Act has discriminated against mom-and-pop stores by forcing them to pay suppliers a higher wholesale price for cigarettes than larger retail chains they compete with. With single-store operators comprising two-thirds of our retail membership, NYACS supports amending the CMSA to establish one, uniform wholesale price level that is acceptable to all NYACS member retailers and wholesalers. In addition, NYACS seeks to increase the state minimum retail markup on cigarettes from the current 7% to 18%, due to escalating costs of doing business. NYACS also supports a concurrent modest increase in the wholesale markup, keeping in mind that in 2002 the wholesale industry received a substantial boost in the form of a statutory 20¢-per-carton "handling fee" paid by retailers to wholesalers.

• Legislative & administrative initiatives to deter the theft of gasoline

Higher gasoline prices have increased the incidence of motorists filling their tanks and driving off without paying. To deter such thefts, NYACS supports legislation to make the penalty for such thefts more severe – suspension of the perpetrator's driver's license. At least 25 other states already impose this penalty. In addition, NYACS supports updating the barcode on the New York driver’s license so that cash customers can use it to activate fuel pumps, eliminating the inconvenience of having to prepay inside the store.

• Reforming ABC laws to reflect a 21st century marketplace

In order to maximize compliance by the industry, Alcoholic Beverage Control laws and regulations governing the sale of beer for off-premise consumption need to be clear, sensible, and reflect the realities of today’s marketplace. In many cases, they don’t. NYACS supports amending ABC laws and regulations so that licensed retailers of beer understand exactly what the rules are surrounding licensing, inventory, signage, supply chain, and other issues.

• Efforts to reduce credit card fees for retailers and their customers

The processing/interchange fees paid to banks and credit card companies by New York convenience stores now often exceed the typical retailer’s net margin on motor fuel. These fees are excessive. In many cases retailers are forced to pay fees for processing credit-card payment on the state and local taxes included in the cost of a gallon of gas. NYACS supports the National Association of Convenience Stores’ effort to address this issue at the federal level, but will also support New York State-specific initiatives to remedy this growing problem. In addition, NYACS supports state-level legislation to require credit and debit card companies and issuing banks to fully disclose to merchants all rules, rates, and terms for processing card transactions.

• Injecting common sense into regulation/taxation of motor fuel retailing

- The price gouging law needs to be amended to assign a government officer or agency responsibility for declaring the onset of an “abnormal market disruption” that triggers price controls, and to clearly and reasonably define the term “gross disparity.” How can the state hold retailers accountable without first telling them the rules?

- Motor fuel in New York State is subject to multiple taxes, all based upon the same gallon of product sold. These include the Petroleum Business Tax, state motor fuel tax and diesel motor fuel tax, petroleum testing fee, and state and local sales tax. Administratively, each tax requires separate calculation and data entry forms. To reduce paperwork for retailers and the state, NYACS favors consolidating motor fuel taxes into one single tax calculated on a per gallon basis, reportable on one form.

- New York State taxes on motor fuel are too high compared with other states, artificially inflating pump prices and creating the mistaken impression among New York consumers that retailers are to blame. To keep New York competitive, its fuel tax rates must be lowered.

• Approval for convenience stores and supermarkets to sell wine

NYACS supports the concept of amending the Alcoholic Beverage Control law to permit food and grocery stores to apply for a license to sell wine for off-premise consumption, as long as there is no trade-off under which liquor stores would be allowed to begin selling cigarettes and as long as the change is implemented in a way that does not place convenience stores at a disadvantage with another class of retail trade.

• Enactment of civil penalties for minors who possess tobacco

Preventing youth access to tobacco should be a shared responsibility among retailers, their employees, the community, and young people themselves.  Since most underage smokers get cigarettes not from stores, but from adult relatives or acquaintances, the only way to stop teen smoking is to stop teens who are smoking.  Therefore, New York must make it illegal for minors to possess and/or use tobacco, as 45 states already do.

• Restoring fairness, balance to retail tobacco regulation/enforcement

Wide variations in enforcement practices from one county to the next are unfair to the regulated community. Statewide standards should be enacted to instill uniformity, fairness, and accountability in the way health departments carry out compliance checks, notify licensees of compliance check outcome, and adjudicate offenses.  For example:

Stipulation Offer:  Misleading if it doesn't disclose all penalties
Notification of Failure:  Should be made to owner within 24 hours
Notification of Compliance:  Should be made in writing to owner within 7 days
Hearing Officer:  Should be an impartial town justice, not a health department ally
Appeal Process:  Should be the same, regardless of enforcement agency

In addition, Public Health Law amendments enacted on 9/1/00 require that if a retailer's tobacco license is suspended for an underage sale, his lottery license is suspended as well. There is no justification for such linkage. They are two separate licenses, with separate rules, license fees, agencies, and enforcement procedures. They should be uncoupled.

• The agenda of the NY Main Street Small Business Coalition

NYACS supports the legislative and regulatory agenda of the New York Main Street Small Business Coalition, an Albany-based alliance of statewide membership organizations representing independent retailers, farmers, truckers, hoteliers, and other neighborhood businesses. It provides a unified voice on statewide legislative and regulatory issues that broadly affect the ability of small businesses to contribute to New York's economic vitality.

NYACS Will Actively Oppose…

• Expansion of bottle bill to include non-carbonated beverages

NYACS opposes expansion of the deposit container law to include fruit juices, sport drinks, bottled water, iced tea and other non-carbonated beverages.  Redemption and storage of returnable bottles and cans is already a nuisance for smaller stores; the additional handling and storage burdens and heightened sanitation risk would make it a nightmare.

• Mandatory increases in personnel costs i.e. forced health coverage

New York retailers are already struggling with upward pressure on payroll costs triggered by the state-mandated three-step hike in the minimum wage (3rd increase to $7.15 took effect 1/1/07). NYACS vehemently opposes any further government-inspired, job-killing wage inflation or "pay or play" health insurance spending mandate such as that enacted by New York City and Suffolk County.

• Higher taxes/fees directly impacting C-stores and their customers

The state excise tax on cigarettes last increased in 2002 (from $1.11 per pack to $1.50). Since then, surrounding states have increased their taxes considerably, exerting political pressure on New York to increase again. However, the last increase backfired – New York is now collecting less revenue at $1.50 a pack than it was at $1.11 a pack, because so many smokers have turned to untaxed, unlicensed, unregulated sources of cigarettes. NYACS also opposes increasing beverage taxes and licensing fees.

• Hysteria-based motor fuel temperature compensation standards

Media coverage has created concern that consumers are overcharged when they buy gasoline in hot weather, spurring a clamor to mandate temperature compensation at the pump. NYACS suspects that any gain to New York consumers would be so insignificant as to not justify the investment in new equipment. The temperature control debate should focus on objective analysis of facts, not hype or conjecture. A pending study by the National Academy of Sciences will likely provide these facts. In the meantime, consumers should be reassured that their local sealer of weights and measures inspects all retail gas pumps annually to verify that a gallon is a gallon.

• Unwarranted marketing restrictions on retailers and wholesalers

- NYACS recognizes that protecting the safety of the nation's food supply necessitates proper labeling of certain products, and we are committed to complying with such practices.  But we will oppose the proliferation of excessive and unwarranted labeling requirements.

- While our members share society's concern about proper nutrition, NYACS believes no customer should be denied access to or charged more for a particular food product due to knee-jerk public policies arising from irrational theories about eating habits.

- In defense of our members' First Amendment rights, NYACS opposes statewide or local efforts to prohibit retailers from displaying tobacco, beer or other product signage in windows of their premises.

- NYACS opposes any attempt to limit or prohibit overnight sales of beer at stores that also sell gas.  Such proposals are rooted in the theory that such sales promote drinking and driving. There is no factual basis for that conclusion.  NYACS also opposes further statewide restrictions on hours when licensed retailers may sell beer for off-premises consumption.

• Changing the tobacco purchase age without holding minors accountable

The concept of raising the tobacco purchase age from 18 to 19 merely nibbles around the edges of the youth smoking problem and will yield no meaningful progress. Since most underage smokers get cigarettes not from stores, but from adult relatives or acquaintances, the only way to stop teen smoking is to stop teens who are smoking by passing a possession law, as 45 states already have.

• Excessive, penalty-driven DEC pump-and-tank enforcement

In parts of the state, the Department of Environmental Conservation has levied exorbitant fines against retailers for seemingly minor deficiencies related to monitoring underground petroleum storage tank inventories. The expectations of the Department in this area should be clarified, and enforcement practices from one region to the next made more consistent. The overall goal of enforcement should be corrective action and achieving compliance, not excessive punishment or revenue enhancement.

• Required licensing of non-bank-owned ATM machines

Some state legislators and localities are seeking to require retailers who own their own automated teller machines to pay annual fees to register them, ostensibly to guard against "identity theft." The state can easily compile a list ATM locations without requiring stores to pay $50 or $100 a year for the privilege of keeping the ATM they've responsibly operated for 10 years or more.

Home - About NYACS - Trade Show - The Industry - Membership - Contact Us - Issues - Tools