This Paterson plan is the start of a long debate in the state capital of Albany on [image-nocss] revenue and spending for the fiscal year that begins April 1, 2009. "We will have the chance to show the legislature how onerous these taxes and fees are, especially in an environment where state tax policy continues to chase away our core customers," Calvin said.
He offered a rundown of tax and fee proposals affecting c-stores:
TOBACCO REGISTRATION FEE: For many years, the annual fee to register as a retail tobacco dealer with the state Tax Department has been a straight $100 per store. Paterson wants to change that to a graduated fee schedule ranging from $100 to $5,000 based on sales volume. The schedule is not yet available.
SODA TAX SURCHARGE: To discourage kids and adults from consuming excessive amounts of soft drinks containing sugar, there would be a new "obesity tax" on nondiet soda and fruit drinks containing less than 70% natural fruit juice. Designed to generate $404 million in new revenue, it would be an 18% sales tax surcharge on top of existing state and local sales taxes, which average 8%.
CIGAR TAX HIKE: The excise tax would shift from 37% of wholesale value to a flat 50 cents per cigar.
TAX ON LITTLE CIGARS: Last year, the legislature passed a bill saying little cigars would be reclassified as "cigarettes" for tax purposes only if and when the federal government did the same. Paterson proposes to reclassify them now, regardless of federal policy, making the tax $2.75 a pack rather than 37% of wholesale value.
BEER TAX INCREASE: The excise tax on beer would more than double, from the current 11 cents per gallon to 24 cents, with a floor tax on inventories as of the April 1, 2009, effective date.
FLAVORED MALT BEVERAGES: FMB's would be taxed as liquor (67 cents per liter) rather than as beer (11 cents per gallon). This was proposed last year by then-Gov. Eliot Spitzer but rejected. There would be floor tax on inventories as of the 4/1/09 effective date.
PREPAID SALES TAX ON CIGARETTES: The prepaid sales tax on cigarettes would increase from 7% of the base retail price to 8%, effective June 1, 2009.
FOOD SERVICE LICENSES/PENALTIES: License fees for retail food establishments would increase from $100 to $250 biennially. In addition, penalties for food inspection deficiencies would more than triple.
SALES TAX ON MOTOR FUEL: Paterson wants to repeal the 8-cents-per-gallon cap on the state sales tax on motor fuel, and revert to a percentage-based tax (4%). Thus, if we were to see a return to $4-a-gallon gasoline, motorists would pay 16 cents a gallon in state sales tax instead of 8 cents.
BOTTLE BILL EXPANSION: The deposit container law would be expanded to cover bottled water, iced tea, juice, energy drinks and other non-carbonated beverages. This has been proposed each of the last five years but defeated by a beverage industry coalition NYACS is a part of.
Calvin said there was one potential piece of good news in the governor's budget. Paterson proposed to allow supermarkets, c-stores and drug stores licensed to sell beer to begin selling wine, a long-standing NYACS goal; however, the store would have to pay a hefty one-time "franchise fee" equal to 0.46 of 1% of their total gross sales in the previous year. Thus, a store with $1 million in sales would have to ante up $4,600, he said.
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