Cigarette Tax

Effective in 2009:

New York City now has the authority to adopt rules that require electronic filing of tax returns.
The interest rate on underpayments has been increased from the federal short-term rate plus five percent to the federal short-term rate plus seven percent. Also the default rate for underpayments has been increased from six percent to seven and one half percent.
Certain taxpayers and tax prepares who file using tax software may be required to file electronically and could be subject to civil penalties for failure to do so.
Provisions detailing crimes applicable to the tax has been redefined to conform to recent New York State revisions.

The New York State and City Cigarette Tax must be paid on the possession of all cigarettes, whether bought for resale or consumption. Cigarette Tax is paid once on each pack of cigarettes, generally by the wholesale vendor, who passes the cost on to the retail buyer through the price of the cigarettes.

Who Is Subject to This Tax?
The tax is paid by an agent or distributor and passed along to the consumer in the cost of each pack of cigarettes.

Who is Exempt from the Tax?
No tax is owed on cigarettes under the following circumstances:

The use of two cartons (400 cigarettes) or less in New York City, if the user brings the cigarettes into the City for use, not for sale;
Cigarettes sold to the United States Government;
Cigarettes sold to or by a voluntary unincorporated organization of the armed forces operating a place for the sale of goods pursuant to federal regulations;
Cigarettes sold to the State of New York, or any public corporation, or political subdivision of the state, not for resale;
Cigarettes possessed by an agent or wholesale dealer for sale to an out-of-City dealer, or for sale and shipment to a person in another state for use there; and
Cigarettes sold to the United Nations, its personnel and certain qualified diplomatic personnel.

Tax Forms and Filing Information
The Cigarette tax is paid by the purchaser of the cigarettes as part of the purchase price. However, there are applications and other forms for wholesale and retail cigarette vendors, stamping agents, and cigarette vending machine operators.
More Cigarette License Information

Tax Rates
The tax is imposed at a rate of 75 cents for each ten cigarettes or fraction of a group of ten or $1.50 for a standard pack of 20 cigarettes. However, if a package of cigarettes contains more than 20 cigarettes, the rate of tax on the cigarettes over twenty is 38 cents for each five cigarettes or any fraction of a group of five.

Legal Authority
Local Law: Title 11, Chapter 13, Administrative Code
Enabling Act: Chapter 235 of the Laws of 1952