Sec. 72.2. Refusal to license

Tax Law, §§ 480 and 482-a

(a)

(1) Where a person files an application for a license as a wholesale dealer of cigarettes, or for relicensing as a wholesale dealer, the Department of Taxation and Finance, in circumstances described herein, may refuse to license such applicant and may deny such application pursuant to the provision of this section, provided an opportunity for a hearing has been afforded the applicant.

(2) For purposes of this Part, the term controlling person shall mean any person who is:

(i) an officer, director or partner of an applicant for a license as a wholesale dealer of cigarettes or of a licensee; or

(ii) a shareholder of a corporate applicant or licensee who directly or indirectly owns more than 10 percent of the number of shares of stock of such applicant or licensee entitling the shareholder to vote for the election of the applicant's or licensee's directors or trustees. In the case of a corporate applicant or licensee which at the relevant time has four or fewer shareholders entitled to vote for the election of directors or trustees, in lieu of the more than 10 percent threshold prescribed herein, a direct or indirect ownership of 25 percent or more of the voting stock shall apply.

(b)

(1) The Department of Taxation and Finance may refuse to license or relicense the applicant if any tax imposed under the Tax Law or by any law, ordinance or resolution enacted pursuant to the authority of such law or the city earnings tax on nonresidents imposed pursuant to the authority of article two-E of the General City Law has been finally determined to be due from the applicant or from any controlling person and such tax has not been paid in full.

(2) The department may refuse to license or relicense the applicant if the applicant or any controlling person has been convicted within the preceding five years of a crime provided for in the Tax Law.

(3) The department may refuse to license or relicense the applicant if the license as a wholesale dealer of cigarettes of the applicant has been cancelled or suspended as provided in section 72.3 of this Part within the preceding five years.

(4) The department may refuse to license or relicense the applicant if the applicant or any controlling person was a controlling person of another cigarette wholesale dealer at a time when:

(i) any tax imposed under the Tax Law or by any law, ordinance or resolution enacted pursuant to the authority of such law or the city earnings tax on nonresidents imposed pursuant to the authority of article two-E of the General City Law was finally determined to be due from such other wholesale dealer and such tax has not been paid in full;

(ii) such other wholesale dealer was convicted of a crime provided for if the Tax Law, but only if such conviction occurred within the preceding five years; or

(iii) the license as a wholesale dealer of cigarettes of such other dealer was cancelled or suspended as provided in section 72.3 of this Part, but only if such cancellation or suspension occurred within the preceding five years.

(5) The department may refuse to license or relicense the applicant if the applicant or any controlling person has within the preceding five years, committed any of the acts specified in section 72.3 of this Part.

(6) The department may refuse to license or relicense the applicant if it has cause to believe that such licensing would jeopardize the revenue due under article 20 of the Tax Law, or the cigarette marketing standards contained in article 20-A of such law. For example, the department may request and evaluate any information concerning an applicant's nature and scope of operations, reliability, overall financial status, liquidity or history of financial solvency and stability. Should the department determine that the applicant is not financially sound, lacks a legitimate profit motive or is seeking ostensible status as a wholesale dealer primarily for purposes of circumventing the Cigarette Marketing Standards Act, it may refuse to license or relicense the applicant. The department may, in its discretion, license an applicant upon such terms and conditions as it may deem necessary for the protection of such revenue and standards.

(7) The department may refuse to license or relicense the applicant if the applicant or any controlling person has been finally determined to have violated any of the provisions of article 20 or article 20-A of the Tax Law, or any rule or regulation adopted pursuant thereto.