Prepaid sales tax on cigarettes

Cigarette agents or other wholesalers of cigarettes must charge their customers the exact amount of tax they already prepaid on the cigarettes being sold. If the agents or wholesalers paid tax at the prepaid rate applicable before September 1, 2025, they must pass through the tax at that rate. If the agents or wholesalers paid the new prepaid rate, they must pass through the tax at the new rate. 

Every year, the Tax Department adjusts the base retail price of cigarettes by a factor based on the manufacturers’ list prices for standard brand cigarettes sold by the carton.

The prepaid sales tax equals the base retail price of cigarettes, multiplied by the 8% prepaid sales tax rate. This is then rounded to the nearest cent for a pack of cigarettes.

The base retail sales price, effective September 1, 2025, is $15.628 for a pack of 20 cigarettes and $3.903 for each additional five cigarettes.

Example: Using the current base retail sales price, the calculation of the prepaid sales tax for a pack of 20 cigarettes is $15.628 x 0.08 = $1.25 (1.2502 rounded to the nearest cent).

Note: The base retail price of cigarettes does not replace, and does not have any impact on, the cost of cigarettes or the minimum wholesale or retail sales prices set by the Cigarette Marketing Standards Act (Tax Law Article 20-A).

When sellers pass through the prepaid sales tax, they must either provide the purchasers with Form ST-133, Certificate of Prepayment of Sales Tax on Cigarettes, or an invoice that incorporates all the information on this form. The purchasers must keep records of this information for a minimum of three years to support all credits claimed on their sales tax return for prepaid sales tax paid on cigarettes sold to the final customers. Failure to obtain Form ST-133 (or an invoice, as described above) from a supplier will make the purchasers liable for the prepaid sales tax.

A credit or refund of the prepaid sales tax is allowed in any of the following situations:

• A retailer sells cigarettes to a customer and collects the retail sales tax due on the sale.
• A vendor sells cigarettes to an exempt purchaser.
• A wholesale or retail vendor takes cigarettes out of inventory for self-use and pays the required use tax.
• The vendor exports cigarettes for sale or use outside New York State.
• The cigarettes have been destroyed or have become unfit for sale or use.
• The prepaid tax was paid in error.
• The cigarettes are sold to the United States government, its agencies or instrumentalities, or to a voluntary unincorporated organization of the armed forces of the United States operating a post exchange.

Sellers may claim a credit for the prepaid sales tax on cigarettes sold at retail when filing their sales and use tax returns using Sales Tax Web File. To apply for a refund, sellers must use either Form AU-11, Application for Credit or Refund of Sales or Use Tax, or Form CG-114, Claim for Redemption/Refund of Cigarette Tax Stamps and Prepaid Sales Tax.

Except for sales to the Oneida Indian Nation, all packs of cigarettes sold by wholesalers (including agents) to Indian nations, tribes, or reservation cigarette sellers must have New York State tax stamps or, if applicable, joint New York State & New York City tax stamps affixed to them. The Oneida Indian Nation imposes its own taxes and applies their own tax stamps, so the cigarette packs sold to the Oneida Indian Nation do not require New York State stamps. Wholesalers (including agents) must collect the prepaid sales tax on all packs of cigarettes that will be resold to:

• non-Indians, or
• nonmembers of an Indian nation or tribe.

Wholesalers (including agents) do not need to collect the prepaid sales tax on packs of cigarettes sold to Indian nations, tribes, or reservation cigarette sellers if:

• Indian tax exemption coupons are provided, or
• prior approval for the sale is received from the Tax Department.

Wholesalers (including agents) can claim an expedited refund by completing Form CG-114-E, Expedited Claim for Refund for Indian Tax-Exempt Cigarette Sales.

For more information on sales on reservations, see Sales of cigarettes to Indian nations, tribes, or reservation cigarette sellers. 

For information on sales made within the boundaries of the Oneida Reservation, see Oneida Nation Settlement Agreement.

For more historical rates, see Important notices for the applicable year.

• Tax Law: §§ 1103, 1111(j), and 1121
• Memorandum: TSB-M-14(1)M, (4)S, Federal Court Ratifies Settlement Agreement by the Oneida Nation, the State of New York, the County of Madison and the County of Oneida

For more information on minimum wholesale or retail sales prices, see Publication 508, Minimum Price List for Cigarettes, and Publication 509, Minimum Wholesale and Retail Cigarette Prices.