2019 New York Laws
TAX - Tax
Article 20-A - Cigarette Marketing Standards
483 - Definitions.

§  483.  Definitions.  (a)  Any  term which is defined by section four
hundred seventy of this chapter shall have the same meaning when used in
this article, except that for purposes of  this  article  the  following
terms shall have the meanings herein indicated:
  1.  "Basic  cost  of  cigarettes"  shall  mean  the  invoice  cost  of
cigarettes to the agent who purchases  from  the  manufacturer,  or  the
replacement  cost  of  cigarettes  to  the  agent,  in the quantity last
purchased,  whichever  is  lower,  less  all  trade  discounts,   except
discounts  for  cash, to which shall be added the full face value of any
stamps which may be required by law.
  2. "Wholesale dealer" shall mean any person, other than an agent,  who
sells  cigarettes  to  retail  dealers  or other persons for purposes of
resale only and who maintains a separate warehousing  facility  for  the
purpose  of  receiving  and  distributing  cigarettes and conducting its
wholesale business. If such person is also a retail dealer, such  person
shall  maintain separate premises for such retail business. It shall not
include a vending machine operator.
  3. "Chain store"  shall  mean  any  person  or  persons  who  owns  or
maintains  fifteen  or more retail outlets in New York state, having one
hundred percent common ownership, through which cigarettes are  sold  at
retail.   Vending machine operators who sell cigarettes at not less than
fifteen separate outlets shall be considered  to  be  chain  stores.  It
shall  also  include  cooperative  members, franchisees and large volume
outlets. No person shall be considered to be a chain store  unless  such
person has been registered with the commissioner of taxation and finance
as provided in section four hundred eighty-nine of this chapter.
  4.  "Retail  dealer" means any person engaged in selling cigarettes at
retail, and shall include a chain store, a wholesale dealer or an  agent
for purposes of its sales of cigarettes to consumers.
  5.  "Cooperative  member"  shall mean any member of a "cooperative" as
defined  in  subdivision  (c)  of  section  three  of  the   cooperative
corporations  law,  which  operates  a  distribution  center  from which
members  purchase  grocery  products,  including  prepackaged  food  and
non-food  products  such  as  paper  products,  soaps and detergents for
resale and whose members sell cigarettes at retail  through  fifteen  or
more separate establishments in New York state. In order to qualify as a
"cooperative  member"  for  the  purposes of this article, a dealer must
share in the profits  and  losses  of  the  cooperative  and  must  have
purchased  at  least twenty-five percent of the merchandise it purchased
for resale during the preceding  three  months  from  such  cooperative,
excluding  cigarettes  and  petroleum products. Such volume of purchases
shall be measured by the amount paid for such merchandise, prior to  any
patronage dividends or refunds based on patronage.
  The  registrations  of  those  cooperative members registered as chain
stores prior to the effective  date  of  the  chapter  of  the  laws  of
nineteen  hundred ninety which added this paragraph shall not be revoked
by reason of their failure to  meet  the  twenty-five  percent  purchase
requirement,  the  requirement  that  a  cooperative member belongs to a
cooperative which operates a distribution center or the sharing  in  the
profits  and  losses  requirement  of this paragraph five, and upon each
successive reregistration pursuant to section four  hundred  eighty-nine
of  this  chapter, such cooperative members shall not be subject to such
requirements, but shall be subject to all  other  requirements  of  this
article.
  6.  "Franchisee"  shall mean any person or persons engaged in the sale
of cigarettes as a retail dealer who is a  "franchisee"  as  defined  in
article  thirty-three  of the general business law, and whose franchisor

franchises fifteen or more separate retail establishments  in  New  York
state through which cigarettes are sold.
  7. "Large volume outlet operator" shall mean any person or persons who
sell  cigarettes  at one or more retail outlets each of which had annual
gross sales in the previous calendar  year  of  more  than  two  million
dollars excluding petroleum products in this state.
  (b)  1.  (A) The term "cost of the agent" shall mean the basic cost of
cigarettes plus the cost of doing business by the agent as evidenced  by
the accounting standards and methods regularly employed by said agent in
his  determination  of  costs  for  the  purpose  of  federal income tax
reporting for  the  total  operation  of  his  establishment,  and  must
include, without limitation, labor, including salaries of executives and
officers,  rent,  depreciation, selling costs, maintenance of equipment,
delivery  costs,  interest  payable,  all  types  of  licenses,   taxes,
insurance  and  advertising expressed as a percentage and applied to the
basic cost of cigarettes. Any fractional part of a cent in the  cost  to
the  agent  per  carton  of  cigarettes shall be rounded off to the next
higher cent. In the case of sales at retail by an agent,  the  "cost  of
the  agent" shall be the same as the "cost of the retail dealer". In the
case of sales of cigarettes to a chain  store  having  fifteen  or  more
retail outlets, excluding vending machine operators, which are delivered
to  a central warehouse owned and operated by such chain store and which
are delivered to its retail outlets by the chain store, the "cost of the
agent" shall be presumed to be the basic cost of cigarettes. There shall
be determined a separate cost  of  the  agent  for  sales  to  wholesale
dealers and for sales to retail dealers.
  (B) In the absence of the filing with the commissioner of satisfactory
proof  of  a lesser cost of doing business of the agent making the sale,
the cost of doing  business  by  the  agent  shall  be  presumed  to  be
seven-eighths  of  one percent of the basic cost of cigarettes for sales
to wholesale dealers plus one cent per package of  ten  cigarettes,  two
cents  per  package  of  twenty  cigarettes and in the case of a package
containing more than twenty cigarettes, two cents and one-half of a cent
for each five  cigarettes  in  excess  of  twenty  cigarettes,  one  and
one-half  percent  of  the  basic  cost of cigarettes for sales to chain
stores plus one cent per  package  of  ten  cigarettes,  two  cents  per
package  of  twenty  cigarettes  and in the case of a package containing
more than twenty cigarettes, two cents and one-half of a cent  for  each
five   cigarettes   in   excess  of  twenty  cigarettes  and  three  and
seven-eighths percent of the basic cost of cigarettes  with  respect  to
sales to retail dealers plus one cent per package of ten cigarettes, two
cents  per  package  of  twenty  cigarettes and in the case of a package
containing more than twenty cigarettes, two cents and one-half of a cent
for each  five  cigarettes  in  excess  of  twenty  cigarettes  and  the
foregoing  cents  per  pack  shall  be  included  in  the "cost of doing
business by the agent" referred to in paragraphs two and three  of  this
subdivision.
  2.  (A)  The  term "cost of the wholesale dealer" shall mean the basic
cost of cigarettes plus the cost of  doing  business  by  the  wholesale
dealer  as  evidenced  by the accounting standards and methods regularly
employed by said wholesale dealer in his determination of costs for  the
purpose  of  federal income tax reporting for the total operation of his
establishment, and must include, without  limitation,  labor,  including
salaries  of executives and officers, rent, depreciation, selling costs,
maintenance of equipment, delivery costs, interest payable, all types of
licenses, taxes, insurance and advertising expressed as a percentage and
applied to the basic cost of cigarettes, plus the cost of doing business
by the agent with respect to sales of cigarettes to  wholesale  dealers.

Any  fractional  part  of a cent in the cost to the wholesale dealer per
carton of cigarettes shall be rounded off to the next  higher  cent.  In
the  case  of  sales  at  retail by a wholesale dealer, the "cost of the
wholesale  dealer" shall be the same as the "cost of the retail dealer".
There shall be determined a separate cost of the  wholesale  dealer  for
sales to chain stores and for sales to retail dealers.
  (B)  In  the  absence  of  the  filing  with  the  tax  commission  of
satisfactory proof of a lesser cost of doing business of  the  wholesale
dealer  making  the  sale,  the  cost of doing business by the wholesale
dealer with respect to sales to retail dealers shall be presumed  to  be
three  per  centum  of the basic cost of cigarettes, and with respect to
sales to chain stores, five-eighths of one percent of the basic cost  of
cigarettes.
  3.  (A) The term "cost of the retail dealer" shall mean the basic cost
of cigarettes plus the cost of doing business by the  retail  dealer  as
evidenced  by the accounting standards and methods regularly employed by
said retail dealer in his determination of  costs  for  the  purpose  of
federal   income   tax   reporting   for  the  total  operation  of  his
establishment, and shall include, without limitation,  labor,  including
salaries  of executives and officers, rent, depreciation, selling costs,
maintenance of equipment, delivery costs, interest payable, all types of
licenses, taxes, insurance and advertising expressed as a percentage and
applied to the basic cost of cigarettes, plus the cost of doing business
by the agent with respect to sales of cigarettes to retail dealers.  Any
fractional  part  of a cent in the cost to the retail dealer per package
or per carton shall be rounded off to the next higher cent.
  (B) In the absence of the filing with the commissioner of taxation and
finance of satisfactory proof of a lesser cost of doing business by  the
retail  dealer making the sale, the cost of doing business by the retail
dealer shall be presumed to be seven per centum of the sum of the  basic
cost  of  cigarettes  plus  the cost of doing business by the agent with
respect to cigarettes sold to retail dealers.