Sec. 72.1. Licensing of wholesale dealers of cigarettes

Tax Law, §§ 475 and 480

(a)

(1) The Department of Taxation and Finance, upon application, may license a person to be a wholesale dealer of cigarettes as defined in section 70.2(h)(2) of this Title. No person shall sell cigarettes in New York State for purposes of resale nor own, operate or maintain one or more cigarette vending machines in, at or upon any New York premises owned or occupied by someone else, unless such person has been granted and publicly displays, in such person's place of business, a license as a wholesale dealer of cigarettes or unless otherwise provided for in this Title. Further, no cigarette agent shall sell cigarettes to an unlicensed wholesale dealer, or to a wholesale dealer whose license has been cancelled or suspended pursuant to section 72.3 of this Part.

(2) The license granted to a wholesale dealer by the department is personal to the person to whom it is granted and such license is not assignable. Except as provided herein, a license as a wholesale dealer shall continue in effect until cancelled or suspended by the department or until surrendered by the licensee.

(3) Nothing in this subdivision, nor Title, shall be construed to require licensing in any circumstance in which the State is without power to do so by reason of the United States Constitution or any laws enacted pursuant thereto. Furthermore, in isolated circumstances, in which the State has the power to require licensing, the department may allow a person to act in the capacity of a wholesale dealer without obtaining a wholesale dealer's license for an exclusive purpose which is not in the usual course of such person's business. A person who wishes to act in such capacity must receive the advanced written approval of the department or must act under order or direction of a court.

(b)

(1) An application for a license as a wholesale dealer of cigarettes must be made on a form prescribed by the Department of Taxation and Finance for such purpose and must fully disclose all of the information requested therein. Such application must be accompanied by a nonrefundable $1,500 fee for filing the application in the form of a bank check, certified check (or other guaranteed draft acceptable to the department) or money order, made payable to the Department of Taxation and Finance, unless such fee has been paid during the preceding 12 months, in which case, the fee for a new license shall be $1,000. There will be no fee, however, for the filing of an application for a license as a wholesale dealer where such application is based solely upon the ownership, operation or maintenance of one or more cigarette vending machines in, at or upon premises owned or occupied by another person.

(2) The department will review the information submitted by the applicant and may for cause refuse to license such applicant in accordance with section 72.2 of this Part. Upon approval of an application for a license as a wholesale dealer, the department will issue, for prominent public display, an individual certificate of license for each of a wholesale dealer's places of business for such wholesale trade, other than individual vending machines, from which the wholesale dealer will be authorized to sell cigarettes. Each certificate shall bear the address of the appropriate place of business, if applicable, and a common wholesale dealer identification number. Each certificate shall also indicate whether or not the licensee qualifies as a cigarette marketing standards wholesale dealer as defined in article 20-A of the Tax Law. Failure to display such certificate(s) will constitute a violation of article 20 of the Tax Law. See Part 73 of this Title for retail dealers and vending machine registrations and section 75.2 of this Title for vending machine identification.

(3) The department, in order to protect the State's cigarette tax revenue and to insure compliance with the cigarette marketing standards contained in article 20-A of the Tax Law, may periodically review the status of a licensed wholesale dealer and may, at any time, require a wholesale dealer to submit to the department any information necessary for the completion of such review.

(4) Not more often than once every three years, the department (in order to properly administer the cigarette tax imposed by article 20 of the Tax Law or the Cigarette Marketing Standards Act contained in article 20-A of such law) may require every licensed wholesale dealer to file a new application for a license, again comply with, or prove its compliance with, all of the requirements of the Tax Law and this Title in relation to wholesale dealers and to surrender its existing license. The provisions of section 71.8 of this Title apply to the provisions of this paragraph in the same manner and with the same force and affect as if the language had been incorporated in full into this paragraph and had expressly referred to the wholesale dealer's license under this Part. The department may, in its discretion, relicense wholesale dealers and cigarette agents concurrently.

(c)

(1) A wholesale dealer of cigarettes must immediately inform the Department of Taxation and Finance, in writing, of any change to the information shown on the application for a license as a wholesale dealer or as last reported to the department, including but not limited to, any change of name or any change in such dealer's officers, directors or partners or such persons' addresses. However, any change of location of the wholesale dealer, including any additions or deletions of individual places of business, must be reported to the department, in writing, prior to such change.

(2) When shares of stock in a corporation which is a wholesale dealer are acquired by any person, such that (i) a wholesale dealer which had four or fewer shareholders owning, directly or indirectly, the voting stock of such dealer upon such acquisition has more than four shareholders so owning such stock, or (ii) a person not previously owning, directly or indirectly, more than 10 percent of the number of shares of voting stock of the wholesale dealer upon such acquisition owns, directly or indirectly, more than 10 percent of such stock, the wholesale dealer must immediately file a notification of such acquisition with the department.

(d)

(1) A license as a wholesale dealer of cigarettes is not assignable. That is, such license shall not be transferred to any person. In addition to any other meaning, a license shall be deemed assigned, if any change in partnership interest has occurred or if shares of stock of a corporate wholesale dealer are acquired by any person such that the person owns, directly or indirectly, more than 10 percent (25 percent or more in the case of a wholesale dealer which has four or fewer shareholders) of the number of shares of voting stock of such wholesale dealer. Except as provided herein, an assignment of a license is invalid and shall immediately result in the cancellation of such license.

(2) The assignment of a license as a wholesale dealer occasioned by way of bequest or inheritance from a decedent directly to:

(i) an ancestor of the decedent;

(ii) the spouse of the decedent;

(iii) a lineal descendent of the decedent, of the decedent's spouse. or of a parent of the decedent; or

(iv) the spouse of any lineal descendant described in subparagraph (iii) of this paragraph;

will not, of itself, be considered a transfer of license which will operate as grounds to immediately cancel such license provided the Department of Taxation and Finance is promptly notified. However, such assignment by bequest or inheritance shall cause cancellation of the license 90 days after the death of the decedent.

(e)

(1) A license as a wholesale dealer of cigarettes granted pursuant to article 20 of the Tax Law and this Part does not necessarily qualify a person as a wholesale dealer for purposes of the cigarette marketing standards contained in article 20-A of the Tax Law and as defined therein (see Article 2 of this Subchapter).

(2) Where a wholesale dealer of cigarettes wishes to purchase and affix cigarette stamps and possess unstamped packages of cigarettes, such dealer must also obtain a license as a cigarette agent pursuant to Part 71 of this Title unless otherwise specifically provided for herein. Both the application for a license as a wholesale dealer of cigarettes and the application for a license as a cigarette agent are subject to individual application filing fees.

(3) Where a wholesale dealer of cigarettes is also a retail dealer of cigarettes or a cigarette vending machine owner/operator, such wholesale dealer must also comply with the registration provisions of Part 73 of this Title.

(4) Except as provided in this Title, where a wholesale dealer of cigarettes is also a distributor, wholesale dealer or retail dealer of tobacco products, other than cigarettes, or an owner/operator of a vending machine through which such tobacco products are sold, a separate appointment, license and/or registration, as the case may be, must be obtained (see Article 3 of this Subchapter).

(5) A license as a wholesale dealer issued by the New York State Department of Taxation and Finance shall not constitute a license as a wholesale dealer for the City of New York. Persons wishing to engage in business as a New York City wholesale dealer must be licensed pursuant to chapter 13 of title 11 of the Administrative Code of the City of New York.