How Much is the Cigarette Tax?

Thursday, January 27, 2011

How Much is the Cigarette Tax?

There is a combined City and State cigarette tax of $4.25 per pack on all cigarettes possessed for sale or use in New York City. ($2.75 is New York State tax; $1.50 is New York City tax.)

Who Is Responsible for Paying This Tax?

The tax should be paid by the vendor/distributor and passed along to the consumer in the cost of each pack of cigarettes. However, if the vendor/distributor hasn't paid the Cigarette Tax, the customer must do so. This is why it is the purchaser's responsibility to make sure that the appropriate tax stamp is present on every pack of cigarettes he or she buys.

A vendor who promises "tax-free cigarettes" is lying. There is no such thing as "tax-free cigarettes" in New York. And when a vendor is caught, the purchasers are too.

Internet and Direct Mail Vendors - Sellers

Federal law specifically requires that all vendors who sell cigarettes over the Internet and by mail order to register with the state tax administrator in any state that has a cigarette tax before they advertise or make any shipments to that state. Clearly, that would include New York State and New York City. These vendors are also required to report all sales and shipments to these states, and, in the City's case, also report sales and shipments to New York City, to ensure that the cigarette tax is paid.

Vendors who fail to comply may face criminal and/or civil liability for mail and/or wire fraud and for violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act.

Tobacco Advertisers

Finance's Tax Enforcement Division will also target newspapers and magazines that accept false cigarette advertising, such as ads for "tax-free cigarettes." These publications are misleading the public and encouraging tax fraud, and Finance is prepared to take legal action to stop them.

The Legal Requirements for Purchasing Cigarettes for Resale

Even if you buy cigarettes online on which the tax has been paid, it is not legal to re-sell them in New York unless you have either a Wholesale Cigarette Vendor's License or a Retail Cigarette Vendor's License. Note that both the City and the State must license you to sell cigarettes.

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