Cigarette Tax Enforcement

The sale of cigarettes within New York State and New York City is regulated by federal, state, and local law and enforced by the New York City Department of Finance and the New York State Department of Taxation and Finance.  Finance is engaged in an active campaign against those who try to evade the cigarette tax. This includes an advertising campaign to educate the public, an ongoing effort to bill and collect from those who have purchased untaxed cigarettes, and legal action against those who engage in cigarette tax evasion and fraud. We are also placing sellers, advertisers, shippers, and purchasers on notice and informing them of their legal obligations and responsibilities concerning New York City and State laws.

Whenever Finance obtains purchase, payment, or shipping information from a vendor of untaxed cigarettes, the purchasers must pay the New York City Cigarette Tax. Recently, this occurred when Finance obtained the purchase and shipping records of various Internet cigarette dealers as part of a legal settlement with the companies. To date, Finance has billed and collected the following amounts:

* Still ongoing. Numbers reflect efforts from from September 1, 2006 through October 31, 2009.

Have You Received a Letter from Finance?
If you received a letter from Finance, your name was on the purchase and shipping records of one of these companies, and you are required to pay a Cigarette Tax.

There is a Cigarette Tax Payment Form with the letter you received.  If you submit a completed form and payment in full within 30 days of receiving the letter, Finance will not charge any interest or penalties on what you owe. You may also be eligible for an installment payment plan, if you need one.

NYC Cigarette Tax Payment Form
Download Form (16k)

Request for Cigarette Tax Installment Agreement
Download Form (17k)

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.

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 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.

NYC Cigarette Vendor Licenses
New York City Department of Consumer Affairs - Retail
NYC Wholesale Cigarette Vendor Licenses - Wholesale

New York State Department of Taxation and Finance

Contact Information
New York City Department of Finance
Office of Tax Enforcement
345 Adams Street, 13th Floor
Brooklyn, NY 11201

Or Call 718-403-4300