N.Y.
Tax Law Section 471-E
Taxes imposed on qualified reservations
1.
Indian tax exemption coupon system.(a)
Notwithstanding any provision of this article to the contrary qualified Indians may purchase cigarettes for such qualified Indians’ own use or consumption exempt from cigarette tax on their nations’ or tribes’ qualified reservations. However, such qualified Indians purchasing cigarettes off their reservations or on another nation’s or tribe’s reservation, and non-Indians making cigarette purchases on an Indian reservation shall not be exempt from paying the cigarette tax when purchasing cigarettes within this state. Accordingly, all cigarettes sold on an Indian reservation to non-members of the nation or tribe or to non-Indians shall be taxed, and evidence of such tax will be by means of an affixed cigarette tax stamp.(b)
In order to ensure an adequate quantity of cigarettes on Indian reservations which may be purchased by qualified Indians exempt from the cigarette tax, the recognized governing body of an Indian nation or tribe may annually elect to participate in the Indian tax exemption coupon system for that year. If the recognized governing body of an Indian nation or tribe elects within the time specified by the department to participate in the Indian tax exemption coupon system for that year, the department shall provide the Indian nation or tribe with Indian tax exemption coupons as set forth in this section. If the recognized governing body of an Indian nation or tribe does not elect to participate in the Indian tax exemption coupon system for that year or does not make this election for that year within the time specified by the department, no Indian tax exemption coupons will be provided to that Indian nation or tribe for that year. Instead, for that year, the prior approval system set forth in paragraph (b) of subdivision five of § 471 (Imposition of cigarette tax)section four hundred seventy-one of this article shall be used. When the recognized governing body of an Indian nation or tribe elects to use the Indian tax exemption coupon system for a year, an Indian nation or tribe and a reservation cigarette seller shall be able to present such Indian tax exemption coupons to a wholesale dealer licensed pursuant to this article in order to purchase stamped cigarettes exempt from the imposition of the cigarette tax. Qualified Indians may purchase cigarettes from a reservation cigarette seller exempt from the cigarette tax even though such cigarettes will have an affixed cigarette tax stamp.2.
Indian tax exemption coupons.(a)
If the recognized governing body of an Indian nation or tribe timely elects to participate in the Indian tax exemption coupon system for that year, Indian tax exemption coupons shall be provided to the recognized governing body of such Indian nation or tribe to ensure that such Indian nation or tribe can obtain cigarettes upon which the tax will not be collected that are for the use or consumption by the nation or tribe or by the members of such nation or tribe. The Indian tax exemption coupons shall be provided to such Indian nations or tribes on a quarterly basis for each of the four quarters beginning with the first day of December, March, June, and September of that year. It is intended that the Indian nations or tribes will retain the amount of Indian tax exemption coupons they will need each quarter to purchase cigarettes for official nation or tribal use, and will distribute the remaining Indian tax exemption coupons to reservation cigarette sellers on such nations’ or tribes’ qualified reservations. Only Indian nations or tribes or reservation cigarette sellers on their qualified reservations may redeem such Indian tax exemption coupons pursuant to this section.(b)
The amount of Indian tax exemption coupons to be given to the recognized governing body of each Indian nation or tribe shall be based upon the probable demand of the qualified Indians on such nation’s or tribe’s qualified reservation plus the amount needed for official nation or tribal use.(i)
Probable demand shall be determined by reference to, among other data, the United States average cigarette consumption per capita, as compiled for the most recently completed calendar or fiscal year, multiplied by the number of qualified Indians for each such affected Indian nation or tribe.(ii)
In making a determination of probable demand, the department shall take into consideration any evidence submitted by such recognized governing body relating to such probable demand (e.g., a verifiable record of previous sales to qualified Indians or other statistical evidence) and/or relating to the amount needed for such nation’s or tribe’s official use.(c)
Each Indian tax exemption coupon shall consist of a retention portion for a wholesale dealer’s recordkeeping purposes and a redemption portion for a wholesale dealer’s submission to the department when claiming a refund as set forth in subdivision four of this section, and shall contain the following information:(i)
the identity of the Indian nation or tribe to which it is issued;(ii)
the identity and the quantity of the product for which it is issued;(iii)
the date of issuance and the date of expiration; and(iv)
any other information as the commissioner may deem appropriate.3.
Tax exempt purchaser.(a)
An Indian nation or tribe may purchase cigarettes for its own official use or consumption from a wholesale dealer licensed pursuant to this article without payment of the cigarette tax to the extent that the Indian nation or tribe provides such wholesale dealer with Indian tax exemption coupons entitling the Indian nation or tribe to purchase such quantities of cigarettes as allowed for on each Indian tax exemption coupon without paying the cigarette tax.(b)
A qualified Indian may purchase cigarettes for his or her own use or consumption without payment of the cigarette tax, provided that the qualified Indian makes such purchase on a qualified reservation.(c)
A reservation cigarette seller may purchase cigarettes for resale without payment of the cigarette tax from a wholesale dealer licensed pursuant to this article:(i)
provided that such reservation cigarette seller brings such cigarettes or causes them to be delivered onto a qualified reservation for resale on such reservation;(ii)
to the extent that such reservation cigarette seller provides such wholesale dealer with Indian tax exemption coupons entitling the reservation cigarette seller to purchase such quantities of cigarettes as allowed for on each Indian tax exemption coupon without paying the cigarette tax; and(iii)
provided that such cigarettes are affixed with a cigarette tax stamp.(d)
Wholesale dealers shall sell only tax-stamped cigarettes to Indian nations and tribes, reservation cigarette sellers and all other purchasers, but shall not collect the cigarette tax from any purchaser to the extent the purchaser gives such wholesale dealer Indian tax exemption coupons entitling the purchaser to purchase such quantities of cigarettes as allowed for on each such Indian tax exemption coupon without paying the cigarette tax.4.
Refunds. A wholesale dealer licensed pursuant to this article who has one or more Indian tax exemption coupons may file a claim for refund as provided for in § 476 (Refunds)section four hundred seventy-six of this article with respect to any cigarette tax previously paid on cigarettes it sold without collecting the tax because it accepted an Indian tax exemption coupon from its purchaser pursuant to this section.5.
Tax agreements with Indian nations or tribes. If an Indian nation or tribe enters into an agreement with the state and the legislature approves such agreement regarding the sale and distribution of cigarettes on the nation’s or tribe’s qualified reservation, the terms of such agreement shall take precedence over the provisions of this article and exempt such nation from such taxes to the extent that such taxes are specifically referred to in the agreement, and the sale or distribution, including transportation, of any cigarettes to the nation’s or tribe’s qualified reservation shall be in accordance with the provisions of such agreement.6.
The failure of the department to establish, issue and provide Indian tax exemption coupons, pursuant to subdivisions one and two of this section, or to promulgate any rules, regulations or directives necessary to implement the provisions of this section, shall not relieve wholesale dealers of the obligation to sell only tax-stamped cigarettes to Indian nations and tribes, and to reservation cigarette sellers.
Source:
Section 471-E — Taxes imposed on qualified reservations, https://www.nysenate.gov/legislation/laws/TAX/471-E (updated Sep. 22, 2014; accessed Oct. 26, 2024).
