Over the strenuous objections of retailers, Governor David Paterson and the state legislature approved an increase from the current $100 per store per year to either $1,000, $2,500 or $5,000 annually, depending on sales volumesales of everything, even including motor fuel, which typically accounts for two-thirds of gross sales [image-nocss] of convenience stores offering gasoline.
Teaming up in the effort are the New York Association of Convenience Stores (NYACS), Gasoline & Repair Shop Association of New York, Food Industry Alliance of New York State, Small Business Congress, National Association of Tobacco Outlets (NATO), Long Island Gasoline Retailers Association, New York City Newsstand Operators Association, United 7-Eleven Franchise Owners of Long Island and New York, and National Federation of Independent Business/New York.
An online system is now activated for use by retailers across the state in sending a prewritten message to their state Senate and Assembly members calling for action. The address is www.votervoice.net/groups/nyacs. For background, and additional ways for retailers and others to contact their state officials, visit www.nyacs.org/OperationRollback.htm
"Unless these fees are rolled back, thousands of neighborhood retailers are going to have to forfeit the tobacco category," said James Calvin, NYACS president. "And when that happens, many of the displaced smokers will shift their purchases to unlicensed sources of tobacco, further eroding the state's tax revenue. In addition, with fewer customers coming through our doors, lottery sales will suffer, meaning less state revenue for aid to education."
He said, "No small business should be forced to pay 10 to 50 times more in license fees, especially in the midst of an economic downturn. Those fees should not be designed to punish the licensee for selling a legal product in accordance with all state regulations governing such commerce. They should reflect the state's administrative costs associated with that registration, not business volume, and certainly not sales of products unrelated to the license."
Added Calvin, "It's appalling to saddle law-abiding retailers with exorbitant fees while competing Native American storesmany of which sell 50 times the volume of cigarettes we doare allowed to sell tobacco to New Yorkers without getting a state license or paying any fee at all."
Unless the legislature passes a law before it adjourns June 22 to change the fee, the following fee schedule will be in effect when retailers renew their tobacco registrations for 2010, payable Sept. 20, 2009:
In other tobacco news, in its latest NATO E-News bulletin, NATO said that at the request of the U.S. Alcohol, Tobacco Tax & Trade Bureau (TTB), the group has submitted a letter with recommendations on how the federal government can stop illegal tobacco trafficking in the United States as a result of the SCHIP federal cigarette and tobacco tax increases.
In the letter submitted to the TTB on June 4, NATO made the following recommendations:
Enact federal and state legislation that prohibits the delivery by the U.S. Postal Service of cigarettes and tobacco products purchased over the Internet, by telephone or through mail order. Enact federal and state legislation that requires (1) package delivery companies (UPS, Federal Express, DHL, etc.) to verify that the person to whom tobacco products are being delivered is of legal age to receive such tobacco products, and (2) the payment of all applicable federal excise taxes, state excise taxes and state sales taxes on the tobacco products being shipped. Increase the number of federal enforcement agents in applicable federal agencies to enforce all existing laws the purpose of which are to prevent the illegal trafficking of tobacco products and take steps to enforce state laws that require Native American tribes to remit state cigarette and tobacco excise taxes on tobacco products sold on reservation lands to non-Native Americans. Rescind the federal cigarette and tobacco tax increases that went into effect on April 1, 2009. Given the fact that the significant federal tax rate increases promote illegal trafficking in black market and nontaxed cigarette and tobacco products, the most effective means to stem tobacco trafficking is to rollback the recent federal tax rate increases.
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