NYS Tax Department Announces Policy to Help Curb Untaxed Cigarette Sales Partnership with NYS Gaming Commission and State Liquor Authority bolsters effort to curtail illicit activity
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Retailers caught and found guilty of selling untaxed cigarettes in New York State risk losing other state-issued licenses, including lottery and alcohol sales.
The New York State Department of Taxation and Finance announced that it has joined forces with the New York State Gaming Commission and State Liquor Authority in an initiative to further reduce sales of contraband cigarettes.
Under the policy, a cigarette-licensed retailer found to be in possession of untaxed cigarettes will face immediate enforcement action, ultimately leading to the possible suspension or revocation of licenses to sell tobacco, alcohol, and lottery tickets. The agencies are increasing the deterrent to illegal cigarette sales by targeting the largest revenue drivers for certain retailers.
The Tax Department’s Criminal Investigations Division (CID) has long been charged with inspecting retailers who sell cigarettes to make sure every pack sold in New York State and New York City has the proper tax stamp affixed to it, verifying that the excise taxes have been paid. A vendor could be arrested, fined, and have the license to sell cigarettes suspended for a significant amount of time—and possibly revoked—if they fail to comply.
“That won’t change,” said CID Deputy Commissioner John Harford, “but now we’re raising the cost of ignoring the law through a cooperative agreement with two other state agencies that deal with the same retailers.”
There are approximately 21,000 licensed retailers selling cigarettes in New York State. An overwhelming number of them also sell lottery tickets and liquor.
“The licenses issued to retailers are contingent upon the lawful operation of the business. We want the retailers to understand that the failure to operate lawfully jeopardizes all issued licenses,” Harford added. “No business owner wants to face enforcement actions on three fronts, let alone the maximum penalties those agencies can impose.”
“Enforcement works best when regulatory agencies work together and we are honored to partner with Tax and Finance and the SLA to put a stop to the sale of untaxed cigarettes,” said Gaming Commission Acting Executive Director Ron Ochrym. “The Gaming Commission is committed to making sure that lottery retailers abide by all state laws and regulations.”
“The SLA is committed to partnering with Tax and Finance and the Gaming Commission to eliminate illegal cigarette trafficking,” said SLA Chairman Vincent Bradley. “Businesses found making these illicit sales will be held accountable for defrauding New York State taxpayers and placing retailers who are playing by the rules at a competitive disadvantage.”
Recent Cigarette-Related Arrests
• Brooklyn Bust – 2,700 Cartons of Contraband Cigarettes Seized
• South Carolina Man Pleads Guilty to Criminal Tax Fraud