1103. Prepayment of sales tax on cigarettes. (a)(1) Every cigarette agent shall pay, as a prepayment on account of the taxes imposed by this article and pursuant to the authority of article twenty-nine of this chapter, a tax on cigarettes possessed for sale or use in this state and to which an agent is required to affix cigarette tax stamps under article twenty of this chapter, at the time that the agent is required to purchase and affix such stamps (or as otherwise prescribed by the commissioner pursuant to such article twenty) and the provisions of such article twenty in relation to the use of stamps to evidence payment of the tax imposed by such article twenty shall be applicable to the prepayment imposed by this section, except no tax shall be required to be prepaid on cigarettes sold under circumstances that this state is without power to impose such prepayment or sold to the United States or sold to or by a voluntary unincorporated organization of the armed forces of the United States operating a place for the sale of goods pursuant to regulations promulgated by the appropriate executive agency of the United States, to the extent provided in such regulations and written policy statements of such an agency applicable to such sales.
(2) The tax imposed by this section shall be paid at the same time and in the same manner as the tax imposed by such article twenty with respect to cigarettes. The commissioner may, in the commissioner's discretion, permit an agent to pay the tax imposed under this section at the same time that the agent pays for cigarette tax stamps under article twenty of this chapter and may require any such agent to file with the department a bond issued by a surety company approved by the superintendent of financial services as to solvency and responsibility and authorized to transact business in the state or other security acceptable to the commissioner, in such amount as the commissioner may fix, to secure the payment of any sums due from such agent pursuant to this section. If securities are deposited as security under this subdivision, such securities shall be kept in the custody of the commissioner and may be sold by the commissioner if it becomes necessary to do so in order to recover any sums due from such agent pursuant to this section, but no such sale shall be had until after such agent shall have had an opportunity to litigate the validity of any prepayment of tax if it elects to do so. Upon any such sale, the surplus, if any, above the sums due under this section shall be returned to such agent. Any bond or security required under this section may be jointly administered with the bond or security required of the agent under section four hundred seventy-two of this chapter and in such event shall secure payment of the sums due under such article twenty and under this section. The tax imposed by this section and the portion of the cost of any stamp which evidences payment of the tax imposed by this section and which is attributable to the tax imposed by this section shall not be included in the term "basic cost of cigarettes" as such term is defined in section four hundred eighty-three of this chapter.
(3) Every person other than an agent shall prepay the tax imposed by this section at the same time and in the same manner as the use tax imposed by section four hundred seventy-one-a of this chapter. The commissioner may require any compensating use tax imposed by section eleven hundred ten and pursuant to the authority of article twenty-nine of this chapter to be paid at such time after allowing for the credit provided by subdivision (b) of section eleven hundred twenty-one of this article.
(4) The amount of the prepayment for cigarettes imposed by this section shall be computed pursuant to the provisions of subdivision (j) of section eleven hundred eleven of this article.
(b) Except as otherwise provided in this section, the taxes required to be prepaid pursuant to this section shall be administered and collected in a like manner as the taxes imposed by sections eleven hundred five and eleven hundred ten of this article. All the provisions of this article relating to or applicable to the administration, collection and disposition of the taxes imposed by such sections shall apply to the tax required to be prepaid under this section so far as such provisions can be made applicable to such prepayments of tax with such limitations as set forth in this article and such modifications as may be necessary in order to adapt such language to the tax so imposed; provided, however, that the provisions of paragraph one of subdivision (c) of section eleven hundred thirty-seven of this article shall not be applicable to such tax required to be prepaid under this section. Such provisions shall apply with the same force and effect as if the language of those provisions had been set forth in full in this section except to the extent that any provision is either inconsistent with a provision of this section or is not relevant to the tax required to be prepaid by this section. For purposes of this section, any reference in this article to the tax or taxes imposed by this article shall be deemed to refer to the tax required to be prepaid pursuant to this section unless a different meaning is clearly required.
(c) Nothing in this article shall be construed to require the payment of the tax required to be prepaid pursuant to this section more than once upon cigarettes possessed for sale or used within the state. When the prepaid tax imposed pursuant to this section is paid, it shall have been so paid on account of the taxes imposed by this article and pursuant to the authority of article twenty-nine of this chapter with respect to the retail sale or the use of cigarettes. Nothing in this section shall modify or affect the taxes imposed by sections eleven hundred five and eleven hundred ten of this article as applied to receipts from the sale, or to the use, of such cigarettes.
(d) Deposit and disposition of revenue. (1) Consistent with sections eleven hundred forty-eight of this article and twelve hundred sixty-one of this chapter, the taxes required to be prepaid pursuant to this section and interest and penalties thereon received by the commissioner, after deducting the amount which the commissioner shall determine to be necessary for reasonable costs of the commissioner in administering, collecting, and distributing such taxes, shall be deposited daily with such responsible banks, banking houses or trust companies, as may be designated by the comptroller, to the credit of the comptroller. Of the total revenue collected or received under this section, the comptroller shall retain in the comptroller's hands such amount as the commissioner may determine to be necessary for refunds under this article and pursuant to the authority of article twenty-nine of this chapter.
(2) On or before the twelfth day of each month, after reserving such amount for such refunds and such costs, the commissioner shall determine the amount of all revenues so received during the prior month as a result of the taxes, interest and penalties so imposed and, in addition, on or before the last day of June and December the commissioner shall determine in like manner the amount of such moneys received during and including the first twenty-five days of said months. The commissioner shall determine the proportion of revenues attributable to receipts for the period for which the determination is made pursuant to the preceding sentence from taxes on sales and uses of property and services and rent and amusement charges imposed by this article and pursuant to the authority of article twenty-nine of this chapter and administered by the commissioner which is payable to each jurisdiction determined without regard to this section. The amount of revenues so determined pursuant to this section shall be deposited and distributed by the comptroller in accordance with the same percentage amount to which a jurisdiction is entitled determined without regard to this section. Where the amount so determined in any distribution from such taxes (other than the tax imposed by this section) is more or less than the amount due, the amount of the overpayment or underpayment shall be determined as soon after the discovery of the overpayment or underpayment as is reasonably possible and subsequent determinations shall be adjusted by subtracting the amount of any such overpayment from or by adding the amount of any such underpayment to such number of subsequent payments as the comptroller and the commissioner shall consider reasonable in view of the amount of the overpayment or underpayment and all other pertinent facts and circumstances. The commissioner shall not be liable for any overestimate or underestimate of the amount of the distribution. Nor shall the commissioner be liable for any inaccuracy in any determination with respect to the amount of the distribution or any required adjustment with respect to the distribution, but the commissioner shall as soon as practicable after discovery of any error adjust the next determination under this section to reflect any such error.
Last modified: February 3, 2019