TAF-27-10-00013-E Sales of Cigarettes on Indian Reservations

7/7/10 N.Y. St. Reg. TAF-27-10-00013-E

NEW YORK STATE REGISTER

VOLUME XXXII, ISSUE 27

July 07, 2010

RULE MAKING ACTIVITIES

DEPARTMENT OF TAXATION AND FINANCE

EMERGENCY RULE MAKING

 

I.D No. TAF-27-10-00013-E

Filing No. 664

Filing Date. Jun. 22, 2010

Effective Date. Jun. 22, 2010

Sales of Cigarettes on Indian Reservations

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:

Action taken:

Addition of sections 74.6 and 74.7 to Title 20 NYCRR.

Statutory authority:

Tax Law, sections 171, subd. First; 471(1), (4), and (5); 471-e; and 475 (not subdivided)

Finding of necessity for emergency rule:

Preservation of general welfare.

Specific reasons underlying the finding of necessity:

Legislation was recently enacted that applies to cigarettes sold to Indian nations and tribes and reservation cigarette sellers on or after September 1, 2010. An emergency measure was the only way for the Commissioner to put regulatory amendments in place on a timely basis to implement the legislation and to comply with the new statutory requirements as well as the rule making requirements of the State Administrative Procedure Act.

Subject:

Sales of cigarettes on Indian reservations.

Purpose:

To implement certain provisions of recently enacted legislation concerning sales of cigarettes on Indian reservations.

Substance of emergency rule:

This rule concerns the collection of taxes on sales of cigarettes made on New York State Indian reservations as required by sections 471 and 471-e of the Tax Law, and provides procedures to be followed by New York State licensed cigarette stamping agents for the certification process required by section 471 of the Tax Law.

Section 1 of the rule adds a new section 74.6 to the cigarette tax regulations to address sales of cigarettes on Indian reservations and to describe the two statutory mechanisms (systems) for the delivery of quantities of tax-exempt cigarettes to Indian nations or tribes for the personal use and consumption of their qualified members based on their probable demand plus the amount needed for official nation or tribal use. Indian nations or tribes may elect to participate in the Indian tax exemption coupon system established in section 471-e of the Tax Law, or, if such election is not made, the prior approval system established in section 471(5) of the Tax Law will be used. Under the prior approval system New York state licensed cigarette stamping agents and wholesale dealers that have received prior approval from the Tax Department may sell certain quantities of stamped untaxed packages of cigarettes to Indian nations or tribes and reservation cigarette sellers. The rule provides specificity concerning the methodology and procedures to be used by the department for the statutorily required calculation of probable demand used in both systems.

Section 2 of the rule adds a new section 74.7 to the cigarette tax regulations relating to the statutory provisions of section 471(4) that require every cigarette stamping agent that purchases unstamped packages of cigarettes intended for resale in New York State to annually provide its supplier and the Tax Department with a certification, under penalty of perjury, that the cigarettes will not be resold in violation of Article 20 of the Tax Law. Procedures to be followed for the certification process are set forth in the rule, such as certification signature and swearing requirements, time periods covered by the certification, and the contents of the certification. With regard to the contents, the certification must specifically provide that the agent will only make sales of tax-exempt stamped packages of cigarettes to Indian nations or tribes or to reservation cigarette sellers that are in accordance with the provisions of new section 74.6 of the rule.

Section 3 of the rule provides that it shall take effect on the date that the Notice of Emergency Adoption is filed with the Department of State and shall apply to all cigarettes sold on or after September 1, 2010.

This notice is intended

to serve only as a notice of emergency adoption. This agency intends to adopt this emergency rule as a permanent rule and will publish a notice of proposed rule making in the State Register at some future date. The emergency rule will expire September 19, 2010.

Text of rule and any required statements and analyses may be obtained from:

John W. Bartlett, Tax Regulations Specialist 4, Department of Taxation and Finance, Taxpayer Guidance Division, Building 9, W. A. Harriman Campus, Albany, NY 12227, [phone], email: [e-mail]

Regulatory Impact Statement, Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement

A Regulatory Impact Statement, Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement are not submitted, but will be published in the Register within 30 days of the rule's effective date.