§ 480 — License

New York § 480

• Jurisdiction: New York
• Law TAX: Tax
• Art. 20: Tax On Cigarettes and Tobacco Products

Text

§ 480. License. 1. General. (a) On and after July first, nineteen\nhundred thirty-nine no person shall be a wholesale dealer unless he has\nbeen granted and publicly displays in his place of business a license\nfrom the department. Applications for licenses shall be made on forms\nprescribed by the commissioner.\n (b) Applications shall be accompanied by proof of the applicant's\nfinancial responsibility, including, but not limited to, satisfactory\nproof of a minimum net worth of twenty-five thousand dollars if the\napplicant is an individual, or net worth in the capitalization of the\nbusiness if the applicant is not an individual equal to a minimum of\ntwenty-five thousand dollars.\n (c) Each applicant shall file with the department a bond issued by a\nsurety company approved by the superintendent of financial services as\nto solvency and responsibility and authorized to transact business in\nthe state, in the face amount of ten thousand dollars, to secure payment\nof any sums due for any violation of article twenty or article twenty-A\nof this chapter, or the regulations of the commissioner thereunder.\n (d) Each applicant shall file satisfactory proof that it will maintain\na secure separate warehousing facility for the purpose of receiving and\ndistributing cigarettes or tobacco products and conducting its wholesale\nbusiness. Such proof shall consist of a copy of a deed, or a copy of an\nexecuted lease for a minimum period of two years, to a separate, secure\nwarehouse. If the applicant carries on another business in conjunction\nwith the warehouse facility, the other business shall also be\nidentified.\n (e) Each applicant shall file satisfactory proof that it will provide\ndisability and workers' compensation insurance for its employees.\n (f) Each applicant shall submit proof of United States citizenship or\neligibility to obtain employment within the United States if not a\ncitizen. If the applicant is not an individual, such proof shall be\nsubmitted with respect to each controlling person of the applicant.\n (g) The fee for the filing of an application for a license shall be\nfifteen hundred dollars, unless such fee has been paid during the\npreceding twelve months, in which case, the fee for a new license shall\nbe one thousand dollars. Each application shall be accompanied by a\ncertified check for the required application fee.\n (h) Except as provided in subdivision four of this section, a license\nshall continue in effect until revoked or suspended for cause or\nsurrendered.\n (i) A license shall not be assignable but an applicant who is\npurchasing the business of a licensee shall file a copy of the contract\nof sale and any related documents with its application.\n (j) The commissioner may for cause refuse to issue, or may suspend or\nrevoke a wholesaler's license, or may forbid a retail dealer to continue\nselling cigarettes or tobacco products or may forbid a person required\nto be appointed as a distributor of tobacco products who has not been so\nappointed from selling cigarettes or tobacco products, after an\nopportunity for hearing has been afforded. A violation of any provision\nof this article or of any regulation issued under it shall be cause to\nforbid a retail dealer to continue selling cigarettes or tobacco\nproducts.\n (k) No agent shall sell cigarettes and no distributor shall sell\ntobacco products to an unlicensed wholesale dealer, or to a wholesale\ndealer whose license has been suspended or revoked, or to a retail\ndealer who is not registered under section four hundred eighty-a of this\narticle, or whose registration has been suspended or revoked, and no\nwholesale dealer shall sell cigarettes or tobacco products to a retail\ndealer who is not registered under section four hundred eighty-a of this\narticle, or whose registration has been suspended or revoked, and no\nretail dealer shall sell cigarettes or tobacco products unless such\ndealer is registered under section four hundred eighty-a of this\narticle.\n (l) Paragraphs (b), (c) and (g) of this subdivision shall not apply to\nthe filing of an application for a license as a wholesale dealer that is\nbased solely upon the ownership, operation or maintenance of one or more\ncigarette or tobacco products vending machines in, at or upon premises\nowned or occupied by another person, or that is based solely upon the\nsale of tobacco products for resale, or that is based upon both the\nownership, operation or maintenance of one or more cigarette or tobacco\nproducts vending machines in, at or upon premises owned or occupied by\nanother person and the sale of tobacco products for resale.\n 2. Refusal to license. The commissioner of taxation and finance may\nrefuse to license an applicant where such applicant files an application\nunder this section and in considering such application the commissioner\nascertains that:\n (a) Any tax imposed under this chapter or under any related statute as\ndefined in section eighteen hundred of this chapter has been finally\ndetermined to be due from such applicant or controlling person and such\ntax has not been paid in full,\n (b) Such applicant or any controlling person has been convicted of a\ncrime provided for in this chapter within the preceding five years,\n (c) Such applicant or any controlling person was the controlling\nperson in another wholesale dealer at the time that:\n (i) Any tax imposed under this chapter or any related statute as\ndefined in section eighteen hundred of this chapter was finally\ndetermined to be due from such other wholesale dealer and such tax has\nnot been paid in full,\n (ii) Such other wholesale dealer was convicted of a crime provided for\nin this chapter within the preceding five years, or\n (iii) The license of such other wholesale dealer was cancelled or\nsuspended pursuant to this section within the preceding five years,\n (d) The license of such applicant has been cancelled or suspended\npursuant to this section within the preceding five years,\n (e) Any controlling person of such applicant has committed any of the\nacts specified in subdivision three of this section within the preceding\nfive years, or\n (f) Such applicant or any controlling person has been finally\ndetermined to have violated any of the provisions of this article or\narticle twenty-A of this chapter, or any rule or regulation adopted\npursuant to this article or article twenty-A of this chapter.\n 3. Cancellation or suspension of license.\n (a) Acts of licensee. The license of any wholesale dealer may be\ncancelled or suspended by the tax commission upon:\n (i) Its failure to file or maintain in full force and effect a bond or\nother security when required or when the amount thereof is increased,\n (ii) Its failure to comply with any of the provisions of this article\nor article twenty-A of this chapter or any rule or regulation adopted\npursuant to this article or article twenty-A of this chapter by the\ndepartment or the commissioner, provided, however, that any violation of\nsection four hundred seventy-three-b of this article shall result in\nlicense cancellation,\n (iii) Its knowingly aiding and abetting another person in violating\nany of the provisions of this article or article twenty-A of this\nchapter or any rule or regulation adopted pursuant to this article or\narticle twenty-A of this chapter by the department or the commissioner,\nprovided, however, that any violation of section four hundred\nseventy-three-b of this article shall result in license cancellation.\n (b) Acts of licensee or controlling person. A license may be cancelled\nor suspended if the tax commission determines that a licensee or any\ncontrolling person:\n (i) Commits fraud or deceit in his or its operations as a wholesale\ndealer or has committed fraud or deceit in procuring his or its license,\n (ii) Has been convicted in a court of competent jurisdiction, either\nwithin or without the state, of a felony, bearing on the licensee's\nduties and obligations under this chapter,\n (iii) Has impersonated any person represented to be a wholesale dealer\nunder this article but not in fact licensed under this section, or\n (iv) Has knowingly aided and abetted the sale of cigarettes or tobacco\nproducts by a person which such licensee or controlling person knows (A)\nhas not been licensed by the commissioner of taxation and finance and\n(B) is a wholesale dealer pursuant to the terms of subdivision eight of\nsection four hundred seventy of this chapter.\n 4. If the commissioner of taxation and finance considers it necessary\nfor the proper administration of the cigarette tax or tobacco products\ntax imposed by this article or the cigarette marketing standards\ncontained in article twenty-A of this chapter he may require every\nperson under this article who holds a license to file a new application\nfor a license in such form and at such time as the commissioner may\nprescribe and to surrender such license. The commissioner may require\nsuch filing and such surrender not more often than once every three\nyears. Upon the filing of such application with the proper fee and the\nsurrender of such license, the commissioner shall issue, within such\ntime as he may prescribe, a new license to each applicant.\n 5. Hearing procedure. (a) General. A notice of proposed cancellation\nor suspension of a license or refusal to issue a license shall be given\nto the wholesale dealer licensed pursuant to this article or to an\napplicant applying for such license in the manner prescribed for a\nnotice of deficiency of tax and all the provisions applicable to a\nnotice of deficiency under article twenty-seven of this chapter,\nincluding, but not limited to, those provisions authorizing the tax\ncommission to abate on its own motion, shall apply to a notice issued\npursuant to this subdivision, insofar as such provisions can be made\napplicable to a notice authorized by this subdivision, with such\nmodifications as may be necessary in order to adapt the language of such\nprovisions to the notice authorized by this subdivision. Such notice of\nproposed cancellation or suspension or of proposed refusal to license\nmust be given to such person within five years from the date of the act\nor omission referred to in subdivision two or three of this section,\nexcept that in the case of acts involving falsity or fraud, such notice\nmay be issued at any time. All of such notices shall contain a statement\nadvising the person to whom it is issued that the cancellation,\nsuspension or refusal to license may be challenged through a hearing\nprocess and that the petition for such challenge must be filed with the\ntax commission within ninety days after the giving of such notice. Where\na license is cancelled or suspended prior to a hearing, the cancellation\nor suspension may be challenged through the hearing process provided the\npetition for such challenge is filed within ninety days after the giving\nof notice of such cancellation or suspension.\n (b) Refusal to license. In the case of a person applying to be\nlicensed as a wholesale dealer, a notice of proposed refusal to license\nshall be issued promptly after application for license is received by\nthe tax commission. Upon timely application therefor, a hearing shall be\nscheduled, and within three months from such application for hearing\n(determined with regard to any postponements of any scheduled hearing or\nconference or other delay made at the request of the applicant) the tax\ncommission shall issue a notice of refusal to license or shall license\nthe applicant. If the tax commission fails to issue a notice of refusal\nto license within such three month period (or such period as extended\npursuant to this paragraph), the tax commission shall license the\napplicant immediately upon the conclusion of such period so long as the\napplicant has filed a bond or other security as required by the tax\ncommission.\n 6. For purposes of this section, the term "controlling person" means\nany person who is:\n (a) An officer, director or partner or, in the case of a limited\nliability company, a member or a person having with respect to such\nlimited liability company authority analogous to that of an officer or\ndirector with respect to a corporation of an applicant for a wholesale\ndealer's license or of a licensee under this article, or\n (b) A shareholder, directly or indirectly owning more than ten percent\nof the number of shares of stock of such applicant or licensee (where\nsuch applicant or licensee is a corporation) entitling the holder\nthereof to vote for the election of directors or trustees. For purposes\nof this paragraph, where reference is made to ownership, directly or\nindirectly, of more than ten percent of the shares of stock of the\napplicant or another person entitling the holder thereof to vote for the\nelection of directors or trustees, in the case of an applicant or\nanother person which at the relevant time has four or fewer shareholders\nholding shares entitling the holders thereof to vote for the election of\ndirectors or trustees, twenty-five percent or more shall be substituted\nas the applicable percentage in such references to ownership, directly\nor indirectly, of voting stock.\n