Retailers caught and found guilty of selling untaxed cigarettes in New York risk losing other state-issued licenses, including lottery and alcohol sales. The New York State Department of Taxation and Finance on Oct. 4 announced that it is working with the New York State Gaming Commission and New York State Liquor Authority (SLA) on an […]
Retailers caught and found guilty of selling untaxed cigarettes in New York risk losing other state-issued licenses, including lottery and alcohol sales.
The New York State Department of Taxation and Finance on Oct. 4 announced that it is working with the New York State Gaming Commission and New York State Liquor Authority (SLA) on an initiative to further reduce sales of contraband cigarettes.
Under the policy, a cigarette-licensed retailer found to be in possession of untaxed cigarettes will face “immediate” enforcement action. It could “ultimately” lead to the possible suspension or revocation of licenses to sell tobacco, alcohol, and lottery tickets. The agencies are “increasing the deterrent” to illegal cigarette sales by targeting the “largest” revenue drivers for certain retailers.
The state Taxation and Finance Department’s criminal-investigations division (CID) has the responsibility of inspecting retailers who sell cigarettes. Its efforts seek to “make sure” every pack sold in New York State and New York City has the proper tax stamp affixed to it, “verifying that the excise taxes have been paid.”
A vendor could be arrested, fined, and have the license to sell cigarettes suspended for a “significant” amount of time — and possibly revoked — if they fail to comply, the department said.
“That won’t change,” John Harford, CID deputy commissioner, said. “But now we’re raising the cost of ignoring the law through a cooperative agreement with two other state agencies that deal with the same retailers.”
About 21,000 licensed retailers sell cigarettes in New York, and an “overwhelming” number of them also sell lottery tickets and liquor.
“The licenses issued to retailers are contingent upon the lawful operation of the business. We want the retailers to understand that the failure to operate lawfully jeopardizes all issued licenses,” Harford added. “No business owner wants to face enforcement actions on three fronts, let alone the maximum penalties those agencies can impose.”
“The SLA is committed to partnering with [the state Taxation and Finance Department] and the [New York State] Gaming Commission to eliminate illegal cigarette trafficking,” Vincent Bradley, chairman of the State Liquor Authority, said. “Businesses found making these illicit sales will be held accountable for defrauding New York State taxpayers and placing retailers who are playing by the rules at a competitive disadvantage.”
