At the urging of his health commissioner, Governor David Paterson has proposed to inflate the state's annual registration fee to sell tobacco at retail from the current $100 per store to $1,000 (annual gross sales of less than $1 million), $2,500 (annual gross sales of $1 million to $10 million) or $5,000 (annual gross sales [image-nocss] of more than $10 million) depending on the store's gross sales of everything including motor fuel.
As the legislature deliberates this and other budget proposals, NYACS is rallying its members to contact their state legislators in protest.
"This punitive fee hike is part of a wider crusade by the public health community to badger retail stores to stop selling legal tobacco products altogether," said NYACS president James Calvin. "Out-year revenue projections in the Executive Budget confirm that this is purposely designed to drive at least 40% of retail tobacco dealers out of the tobacco business by making the registration fee too expensive."
"Registration fees should reflect the state's administrative costs, not business volume, and certainly not sales of products unrelated to the license," said Calvin. "Such fees should not be designed to punish the licensee for selling a legal product in accordance with regulations governing such commerce. While we respect the Health Department's efforts to reduce tobacco consumption, the virtue of that cause does not justify using license fees as a weapon."
He added, "These obscene increases would come at a time when our cigarette sales have dropped 65% or more over the past eight years, mainly due to the epidemic of cigarette tax evasion sanctioned by the State of New York," Calvin said, adding that "tax-free" Native American competitors do not even bother to register and thus pay no fee.
"Essentially, the administration wants to charge us 900% to 4,900% more for the privilege of selling one-third the amount of cigarettes we could be selling if they were enforcing the Tax Law equitably," he concluded.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.