1. There is hereby imposed and shall be paid a tax on all cigarettes possessed in the state by any person for sale, except that no tax shall be imposed on cigarettes sold under such circumstances that this state is without power to impose such tax, including sales to qualified Indians for their own use and consumption on their nations' or tribes' qualified reservation, or sold to the United States or sold to or by a voluntary unincorporated organization of the armed forces of the United States operating a place for the sale of goods pursuant to regulations promulgated by the appropriate executive agency of the United States, to the extent provided in such regulations and policy statements of such an agency applicable to such sales. The tax imposed by this section is imposed on all cigarettes sold on an Indian reservation to non-members of the Indian nation or tribe and to non-Indians and evidence of such tax shall be by means of an affixed cigarette tax stamp. Indian nations or tribes may elect to participate in the Indian tax exemption coupon system established in section four hundred seventy-one-e of this article which provides a mechanism for the collection of the tax imposed by this section on cigarette sales on qualified reservations to such non-members and non-Indians and for the delivery of quantities of tax-exempt cigarettes to Indian nations or tribes for the personal use and consumption of qualified members of the Indian nation or tribe. If an Indian nation or tribe does not elect to participate in the Indian tax exemption coupon system, the prior approval system shall be the mechanism for the delivery of quantities of tax-exempt cigarettes to Indian nations or tribes for the personal use and consumption of qualified members of the Indian nation or tribe as provided for in paragraph (b) of subdivision five of this section. Such tax on cigarettes shall be at the rate of four dollars and thirty-five cents for each twenty cigarettes or fraction thereof, provided, however, that if a package of cigarettes contains more than twenty cigarettes, the rate of tax on the cigarettes in such package in excess of twenty shall be one dollar and eight and three-quarters cents for each five cigarettes or fraction thereof. Such tax is intended to be imposed upon only one sale of the same package of cigarettes. It shall be presumed that all cigarettes within the state are subject to tax until the contrary is established, and the burden of proof that any cigarettes are not taxable hereunder shall be upon the person in possession thereof.
2. It is intended that the ultimate incidence of and liability for the tax shall be upon the consumer, and that any agent or dealer who shall pay the tax to the commissioner shall collect the tax from the purchaser or consumer. Except as hereinafter provided, the tax shall be advanced and paid by the agent. The agent shall be liable for the collection and payment of the tax on cigarettes imposed by this article and shall pay the tax to the commissioner by purchasing, under such regulations as he or she shall prescribe, adhesive stamps of such designs and denominations as he or she shall prescribe. The tax on cigarettes may also be paid by or through the use of metering machines if the commissioner so prescribes. Agents, located within or without the state, shall purchase stamps and affix such stamps in the manner prescribed to packages of cigarettes to be sold within the state, in which case any dealer subsequently receiving such stamped packages of cigarettes will not be required to purchase and affix stamps on such packages of cigarettes. All cigarettes sold by agents and wholesalers to Indian nations or tribes or reservation cigarette sellers located on an Indian reservation must bear a tax stamp.
3. The amount of taxes advanced and paid by the agent as hereinabove provided shall be added to and collected as part of the sales price of the cigarettes.
4. (a) Notwithstanding any provision of law to the contrary, no person, including but not limited to a tobacco product manufacturer, shall sell unstamped packages of cigarettes to any agent, if such person has not been provided with a certification by the agent as required in paragraph (b) of this subdivision.
(b) Any agent who purchases unstamped packages of cigarettes from any person, which are intended for resale in or into the state, shall provide such person and the department with a certification under penalty of perjury that such cigarettes will not be resold by the agent in violation of the terms of this article. Such certification shall be provided to such person and the department prior to the first sale of such cigarettes by such person to the agent following the effective date of this subdivision, and annually thereafter, on such form as shall be prescribed by the commissioner.
5. Prior approval system. (a) For any year that the recognized governing body of an Indian nation or tribe has not elected to participate in the Indian tax exemption coupon system established in section four hundred seventy-one-e of this article, paragraph (b) of this subdivision provides for the prior approval system to be the mechanism as to how Indian nations or tribes or reservation cigarette sellers can purchase adequate quantities of tax-exempt cigarettes for the personal use and consumption of qualified members of the Indian nation or tribe on their nations' or tribes' qualified reservation.
(b) If an Indian nation or tribe does not elect to participate in the Indian tax exemption coupon system, Indian nations or tribes or reservation cigarette sellers may purchase from New York state licensed cigarette stamping agents and wholesalers an adequate quantity of tax-exempt cigarettes based on probable demand on their nations' or tribes' qualified reservation for official nation or tribal or qualified Indian use or consumption from agents and wholesalers who have received prior approval from the department. All such pre-approved tax exempt cigarettes shall nonetheless bear a tax stamp. The department shall grant agents and wholesalers prior approval in a manner and form to be determined by the department and as may be prescribed by regulation. The department shall issue expedited refunds or credits to agents whenever the department grants such prior approvals. Probable demand shall be determined as provided by subdivision two of section four hundred seventy-one-e of this article and as may be prescribed by regulation.
6. Tax agreements with Indian nations or tribes. If an Indian nation or tribe enters into an agreement with the state and the legislature approves such agreement or if an Indian nation or tribe enters into an agreement with the state that is part of a stipulation and order approved by a federal court of competent jurisdiction regarding the sale and distribution of cigarettes on the nation's or tribe's qualified reservation, the terms of such agreement shall take precedence over the provisions of this article and exempt sales to non-members of the tribe or nation and non-Indians by such nation from such taxes to the extent that such taxes are specifically referred to in the agreement, and the sale or distribution, including transportation, of any cigarettes to the nation's or tribe's qualified reservation shall be in accordance with the provisions of such agreement.
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