Increases the tax imposed on the sale of certain tobacco products from 75% to 129% and increases the tax imposed on the retail sale of vapor products from 20% to 48%; makes conforming changes.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A678
SPONSOR: Rosenthal L TITLE OF BILL:
An act to amend the tax law, in relation to increasing the tax imposed
on the sale of tobacco products and the retail sale of vapor products
PURPOSE:
This legislation will increase the tax imposed on the sale of tobacco
and vapor products.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 of the bill amends subdivision 471-b of the tax law to
increase the tax on tobacco products other than little cigars from 75%
of wholesale price to 129% of wholesale price. It also moves snuff from
a tax by weight model to a tax based on the wholesale price.
Section 2 of the bill amends Section 1181 of the tax law to increase the
tax on vapor products from 20% of receipts from the retail sale to 48%
of receipts from the retail sale of such products.
Section 3 of the bill establishes the effective date.
JUSTIFICATION:
Studies consistently show that regularly increasing taxes on tobacco
products is one of the most effective ways to reduce new tobacco initi-
ation and encourage cessation, particularly among youth and young adults
who are especially price conscious.
After the federal tobacco tax was increased in 2009, researchers from
the University of Illinois at Chicago found that a nationally represen-
tative survey of 8th, 10th, and 12th grade students showed that students
who reported using smokeless tobacco products dropped between 16% and
24%. The researchers estimated that there would have been approximately
135,000 - 203,000 more smokeless tobacco users among middle school and
high school students had the federal tax not been increased.
However, New York has not increased its tax rates on tobacco products
since 2010. To discourage tobacco usage, reduce health care costs, and
improve health outcomes for New Yorkers, this bill would increase the
tax on tobacco products from 75% of wholesale price to 129% of wholesale
price, and increase the tax on receipts from the retail sale of vapor
products from 20% to 48%. It would also move snuff from being taxed by
weight to being taxed by a percentage of its wholesale price, as other
tobacco products are, to keep up with inflation.
LEGISLATIVE HISTORY:
2019-20: A.11123 - Referred to Ways and Means
FISCAL IMPLICATIONS:
Undetermined.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
678
2021-2022 Regular Sessions
IN ASSEMBLY(Prefiled)
January 6, 2021
___________
Introduced by M. of A. L. ROSENTHAL -- read once and referred to the
Committee on Ways and Means
AN ACT to amend the tax law, in relation to increasing the tax imposed
on the sale of tobacco products and the retail sale of vapor products
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 1 of section 471-b of the tax law, as amended
2 by section 2 of part QQ-1 of chapter 57 of the laws of 2008, paragraphs
3 (a) and (b) as amended by section 18 and paragraph (c) as added by
4 section 19 of part D of chapter 134 of the laws of 2010, is amended to
5 read as follows:
6 1. There is hereby imposed and shall be paid a tax on all tobacco
7 products possessed in this state by any person for sale, except that no
8 tax shall be imposed on tobacco products sold under such circumstances
9 that this state is without power to impose such tax, or sold to the
10 United States, or sold to or by a voluntary unincorporated organization
11 of the armed forces of the United States operating a place for the sale
12 of goods pursuant to regulations promulgated by the appropriate execu-
13 tive agency of the United States, to the extent provided in such regu-
14 lations and policy statements of such an agency applicable to such
15 sales.
16 (a) Such tax on tobacco products other than [snuff and] little cigars
17 shall be at the rate of [seventy-five] one hundred twenty-nine percent
18 of the wholesale price, and is intended to be imposed only once upon the
19 sale of any tobacco products other than [snuff and] little cigars.
20 (b) [Such tax on snuff shall be at the rate of two dollars per ounce
21 and a proportionate rate on any fractional parts of an ounce, provided
22 that cans or packages of snuff with a net weight of less than one ounce
23 shall be taxed at the equivalent rate of cans or packages weighing one
24 ounce. Such tax shall be computed based on the net weight as listed by
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00802-01-1
A. 678 2
1 the manufacturer, and is intended to be imposed only once upon the sale
2 of any snuff.
3 (c)] Such tax on little cigars shall be at the same rate imposed on
4 cigarettes under this article and is intended to be imposed only once
5 upon the sale of any little cigars.
6 It shall be presumed that all tobacco products within the state are
7 subject to tax until the contrary is established, and the burden of
8 proof that any tobacco products are not taxable hereunder shall be upon
9 the person in possession thereof.
10 § 2. Section 1181 of the tax law, as added by section 1 of part UU of
11 chapter 59 of the laws of 2019, is amended to read as follows:
12 § 1181. Imposition of Tax. In addition to any other tax imposed by
13 this chapter or other law, there is hereby imposed a tax of [twenty]
14 forty-eight percent on receipts from the retail sale of vapor products
15 sold in this state. The tax is imposed on the purchaser and collected by
16 the vapor products dealer as defined in subdivision (b) of section elev-
17 en hundred eighty of this article, in trust for and on account of the
18 state.
19 § 3. This act shall take effect immediately.
