NYACS Helps Block State Tobacco Tax Hikes

The New York Association of Convenience Stores (NYACS) announced yesterday that it has succeeded in stopping New York State from further increasing tobacco taxes and thereby “chasing more customers” away from NYACS member retail outlets.

In the new state budget for 2012-13 that will be adopted later this week, Governor Cuomo and the Legislature agreed to remove the tax changes on cigars and loose tobacco the Governor had proposed two months ago.

NYACS fought these tax hikes, arguing that when tobacco taxes rise in New York, tobacco consumers head for the nearest Indian reservation, border state or bootlegger to avoid paying the higher tax — costing convenience stores business and costing the State tax revenue.

Cigar Tax. Governor Cuomo had proposed to tax cigars at 50% of retail value instead of 75% of wholesale value, with distributors pre-paying a portion of that tax (20 cents per cigar) and the retailer remitting the balance. With NYACS and tobacco-industry allies vigorously opposed, this was dropped from the final budget.

Loose Tobacco. In an effort to curb the commercial roll-your-own cigarette trade, Governor Cuomo proposed to tax all loose tobacco at $4.53 an ounce instead of the current 75% of wholesale. That would have tripled the price of take-home pipe tobacco sold by convenience stores, chasing those customers to tax-free outlets. NYACS showed Albany that the plan would backfire, and it was removed from the budget.

Minimum Markup. The state Senate had proposed increasing the handling fee paid by retail stores to their cigarette wholesale “stamping agent” from the current 2 cents per pack to 14 cents, giving wholesalers a 600% windfall without providing any markup increase whatsoever for retailers. Due to NYACS’ objections, this was rejected as a budget item, although it may resurface as a stand-alone bill in the weeks ahead.

Bottle Bill. The state Senate had also proposed changes to the state’s Bottle Bill, including provisions allowing distributors to pick up empties less frequently than they’re required to now and imposing unnecessary costs on retailers who use reverse vending machines. NYACS protested, and these changes were removed. However, possible Bottle Bill revisions continue to be debated, and could result in a stand-alone legislation.

Taxes/Fees. There are no other new taxes or fees impacting convenience stores in the final budget, fulfilling a key NYACS goal for 2012.​

NYACS President Jim Calvin attributed NYACS’ budget-season success to the active involvement of its Board of Directors and Legislative Committee and outstanding work by its lobbyist Scott Wexler of Ostroff Hiffa & Associates and its legislative counsel Doug Kantor of Steptoe & Johnson. He thanked Gov. Andrew Cuomo, Senate Majority Leader Dean Skelos, Assembly Speaker Sheldon Silve, and their colleagues for listening to the concerns of convenience store operators about these issues.