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2008 TOBACCO RETAILING ISSUES

Halt Unlicensed, Unregulated, Untaxed Sales of Retail Products

   The state Tax Department is shirking its obligation to equally enforce the tax law by refusing to collect taxes on Native American sales of gas and cigarettes to non-Native American New Yorkers. The tax evasion epidemic has crippled the convenience store industry and is growing worse by the day. New York must level the playing field. The tax fairness law must be enforced.
   NYACS joined Assemblyman David Townsend (left) in announcing legal action to compel the Spitzer administration to collect taxes on Indian sales of gas and cigarettes to non-Indian New Yorkers, as required by law.

Press Release on Tax Fairness Litigation
Resources on the Tax Fairness Issue
14-Year Chronology of Tax Fairness Issue

Reject Higher Taxes and Fees Impacting C-Stores and Their Customers

   Increasing the state cigarette excise tax rate even further before solving the tax evasion problem would be reckless and irresponsible. The last two cigarette tax increases (2000 and 2002) proved self-defeating because of the abundance of tax-free sources of cigarettes readily available to New Yorkers. Moreover, the idea of allowing county-level cigarette excise taxes - above and beyond state taxes - as proposed by some New York counties would create greater incentives to smokers to evade taxes while imposing new logistical burdens on cigarette stamping agents and the tax-collecting retail stores they supply.
Why County Cigarette Tax Would Be Self-Defeating
NYACS Testimony on Proposed 2008-09 State Budget


Increase State Minimum Retail Mark-up on Cigarettes

   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.
NYACS Memorandum in Support of S.6048/A.9066
NYACS Memorandum in Opposition to S.453a/S.8837
Comparison of 2007 Cigarette Minimum Markup Legislation

Enact Civil Penalties for Minors Who Possess or Attempt to Buy Tobacco Products, Rather Than Changing the Legal Purchase Age

   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.

Memorandum of Support for Underage Possession Law

Restore Fairness and Balance to Tobacco Enforcement

   A.)  Establish uniform, statewide standards for tobacco 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:
     Notification of Failure:  Should be made to owner within 24 hours
     Notification of Compliance:  Should be made in writing to owner within 7 days
     Stipulation Offer:  Must disclose all penalties and consequences
     Hearing Officer:  Should be an impartial town justice, not a health department chum
     Facing Accuser:  Undercover minor should testify at administrative hearing
     Appeal Process:  Should be the same, regardless of enforcement agency
   B.)  Uncouple tobacco and lottery license actions; leave beer license out of it
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 linking the two licenses. They should be uncoupled. They are two separate licenses, with separate rules, license fees, agencies, and enforcement procedures. Likewise, there is no justification for requiring disciplinary action on a store's beer license for a tobacco-related violation, as has been proposed.


Oppose Further Marketing Restrictions on Retailers and Wholesalers
   Already strangled by excessive marketing restrictions, the convenience store industry, working collectively through NYACS, will continue to oppose:

   •  Extension of MSA restrictions to retailers and wholesalers

   •  Confining sales of cigarettes to "tobacco-only" stores

   •  Unwarranted packaging and labeling regulations
   •  State policies that require some stores to obey regulations while allowing others to ignore them
Memorandum in Opposition to Flavored Cigarette Ban

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