New York Consolidated Laws, Tax Law - TAX § 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   1 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.

1 July 22, 1990.




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