New York City Cigarette Tax

(New York City Administrative Code Title 11, Chapter 13)

Generally

New York City imposes a tax of $1.50 per package of 20 cigarettes (or $0.75 for every 10 cigarettes). In addition, if a pack of cigarettes contains more than 20 cigarettes, a tax of $0.38 is imposed on each additional 5 cigarettes.

The payment of the tax is demonstrated through tax stamps, which are sold by the Commissioner of Finance to agents appointed by the Commissioner. An agent affixes the stamp to a package of cigarettes and “cancels” the stamp in ink with the agent’s assigned identification number prior to delivering the cigarettes to any dealer. Whenever any cigarettes are found in the place of business of a retail dealer without the stamps affixed and cancelled, they are presumed to be kept in violation of the law. Anyone who possesses or transports more than 400 unstamped cigarettes must have invoices or delivery tickets showing the name and address of the seller and purchaser, and the quantity and brands of the cigarettes transported. Without this evidence, such a person will be presumed to be a retail dealer.

If any person fails to pay the tax, the Commissioner of Finance will determine the amount of tax due and notify the person liable for the tax. This determination is final unless, within 90 days of receiving notice, the person liable for the tax (1) serves a petition upon the Commissioner of Finance, and (2) files a petition with the tax appeals tribunal for a hearing. After a hearing, the tax appeals tribunal gives notice of its determination to the person liable for the tax and to the Commissioner of Finance. The determination of the appeals tribunal may be reviewed by the courts.

Penalties

General Penalty: Any person who fails to pay the cigarette tax will be subject to a penalty of 50% of the tax due, but the Commissioner of Finance may waive the penalty if he or she is satisfied that the delay in payment was excusable.

Additional Penalties: In addition to any other penalty, the Commissioner of Finance may impose:

  • A penalty of not more than $100 for every 200 cigarettes (or fraction of 200 cigarettes) in excess of 1,000 cigarettes in unstamped or unlawfully stamped packages that are in the possession of or under the control of any person; and
  • A penalty of not more than $200 for every 10 (or fraction of 10) false, altered, or counterfeit tax stamps (whether affixed to packages or not) in excess of 100 such stamps that are in the possession of or under the control of any person.

In lieu of this penalty, the Commissioner of Finance may impose the following penalties on any person found to be knowingly in possession or control of unstamped cigarettes:

  • Not less than $30 but not more than $200 for every 200 cigarettes (or fraction thereof) in excess of 1,000 but less than or equal to 5,000 cigarettes in unstamped or unlawfully stamped packages knowingly in the possession or control of any person;
  • Not less than $75 but not more than $200 for every 200 cigarettes (or fraction thereof) in excess of 5,000 but less than or equal to 20,000 cigarettes in unstamped or unlawfully stamped packages knowingly in the possession or control of any person; and
  • Not less than $100 but not more than $200 for every 200 cigarettes (or fraction thereof) in excess of 20,000 cigarettes in unstamped or unlawfully stamped packages knowingly in the possession or control of any person

Enforcement and Reporting Violations

The Commissioner of Finance has the authority to assess and determine taxes and violations owed. Failure to pay the tax or any other violations of the tax law may be reported to the Commissioner of Finance, who then may decide whether to take action.