New York Consolidated Laws, Tax Law - TAX § 484. Unlawful acts;  violations of article




(a) Notwithstanding any other provision of law, it shall be unlawful and a violation of this article:

1. For any agent, wholesale dealer or retail dealer, with intent to injure competitors or destroy or substantially lessen competition, or with intent to avoid the collection or paying over of such taxes as may be required by law, to advertise, offer to sell, or sell cigarettes at less than cost of such agent   1 wholesale dealer or retail dealer, as the case may be.

2. For any wholesale dealer:

(A) to induce or attempt to induce or to procure or attempt to procure the purchase of cigarettes at a price less than the cost of the agent with respect to sales to wholesale dealers;  or

(B) to induce or attempt to induce or to procure or attempt to procure any rebate or concession of any kind or nature whatsoever in connection with the purchase of cigarettes.

3. For any chain store:

(A) to induce or attempt to induce or to procure or attempt to procure the purchase of cigarettes at a price less than the cost of the agent with respect to sales to chain stores;  or

(B) to induce or attempt to induce or to procure or attempt to procure any rebate or concession of any kind or nature whatsoever in connection with the purchase of cigarettes.

4. For any retail dealer:

(A) to induce or attempt to induce or to procure or attempt to procure the purchase of cigarettes at a price less than the cost of the agent for sales to retail dealers, if purchased from an agent, or at a price less than the cost of the wholesale dealer;  or

(B) to induce or attempt to induce or to procure or attempt to procure any rebate or concession of any kind or nature whatsoever in connection with the purchase of cigarettes.

5. (A) Upon a first violation of any of the provisions of this article, after due notice and opportunity for a hearing, the commissioner may suspend the license of any agent or wholesale dealer for a period of not more than thirty days or impose a civil fine not to exceed twenty thousand dollars or both such suspension and fine.

(B) Upon a second or subsequent violation committed within three years following a prior finding of violation, after due notice and opportunity for a hearing, the commissioner shall revoke the license of any agent or wholesale dealer unless (i) the penalty imposed for the first violation was a fine only;  or (ii) the commissioner determines, on a showing by the agent or wholesale dealer, that the second or subsequent violation is due to reasonable cause or that such agent or wholesale dealer acted in good faith, in which case the commissioner may suspend such license for a period of not more than sixty days or impose a civil fine not to exceed fifty thousand dollars or both such suspension and fine.

(C) In determining whether to suspend or revoke or in assessing the amount of any fine under this paragraph the commissioner shall give due consideration to the gravity of the violation, the size of the agent's or wholesale dealer's business, the amount of the sale in violation of this article below the minimum markup and the history of previous violations.  The penalties provided for in this paragraph shall be determined, assessed, collected and paid in the manner provided in section four hundred seventy-eight of this chapter, as if such penalties were taxes imposed pursuant to this article.

6. Evidence of advertisement, offering to sell or sale of cigarettes by any agent, wholesale dealer, chain store or retail dealer at less than cost, or evidence of any offer of a rebate in price, or giving of a rebate in price, or an offer of a concession, or the giving of a concession of any kind or nature whatsoever in connection with the sale of cigarettes, or the inducing or attempt to induce or to the procuring or the attempt to procure the purchase of cigarettes at a price less than cost of the agent, wholesale dealer, chain store or the retail dealer, shall be prima facie evidence of intent to injure competitors and to destroy or substantially lessen competition, or of intent to avoid the collection or paying over of such taxes as may be required by law.

(b) 1. An action may be maintained in the supreme court to prevent, restrain or enjoin a violation, or threatened violation, of any of the provisions of this article.  Such an action may be instituted by any person injured by any violation or threatened violation of this article, or by the tax commission.  If in such action a violation or threatened violation of this article shall be established, the court shall enjoin and restrain, or otherwise prohibit, such violation or threatened violation.  In such action it shall not be necessary that actual damages to the plaintiff be alleged or proved, but where alleged and proved, the plaintiff in said action, in addition to such injunctive relief and costs of suit, including reasonable attorney's fees, shall be entitled to recover from the defendant the actual damages sustained by such plaintiff.

2. In the event that no injunctive relief is sought or required, any person injured by a violation of this article may maintain an action for damages and costs of suit in the supreme court as provided for in the civil practice law and rules.

(c) Any contract, expressed or implied, made by any person in violation of any of the provisions of this article is declared to be an illegal and void contract, and no recovery thereon shall be had.

(d) The provisions of this article shall not be applicable to any sale as to which the tax imposed by section four hundred seventy-one of this chapter is not applicable or to a sale to the department of corrections and community supervision of this state for sale to or use by inmates in institutions under the jurisdiction of such department.

1 So in original.  A comma probably should have been inserted.




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