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    NYACS Fights "Obscene" Retail Tobacco Fees

    Annual registration fee to sell tobacco could rise from $100 to up to $5,000, according to association.

    ALBANY -- The New York Association of Convenience Stores (NYACS) is rallying supporters to fight against an increase of the state’s annual registration fee to sell tobacco at retail, from $100 per store to $1,000, $2,500 or $5,000 depending on the store’s gross sales, including motor fuel, according to the organization.

    "These obscene increases would come at a time when our cigarette sales have dropped 65 percent or more over the past eight years, mainly due to the epidemic of cigarette tax evasion sanctioned by the state of New York," NYACS President James Calvin said in a statement, adding "tax free" Native American competitors don’t register and as a result, pay no fee.

    The increase was designed by public health advocates to sharply reduce the number of New York retail outlets selling tobacco, and Gov. David Paterson proposed the measure at the urging of his health commissioner, NYACS stated.

    “This punitive fee hike is part of a wider crusade by the public health community to badger retail stores to stop selling legal tobacco products altogether," Calvin said. "Out-year revenue projections in the executive budget confirm that this is purposely designed to drive at least 40 percent of retail tobacco dealers out of the tobacco business by making the registration fee too expensive."

    The proposed fee increases for sites based on annual gross sales are:

    • $1,000 for stores with less than $1 million in sales, a 900 percent increase;
    • $2,500 for stores with sales between $1 million and $10 million, a 2,400 percent increase; and
    • $5,000 for stores with more than $10 million in sales, a 4,900 percent increase.

    "Registration fees should reflect the state’s administrative costs, not business volume, and certainly not sales of products unrelated to the license," Calvin said. "Such fees should not be designed to punish the licensee for selling a legal product in accordance with regulations governing such commerce. While we respect the health department’s efforts to reduce tobacco consumption, the virtue of that cause does not justify using license fees as a weapon."

    He continued: "Essentially, the administration wants to charge us 900 percent to 4,900 percent more for the privilege of selling one-third the amount of cigarettes we could be selling if they were enforcing the tax law equitably."

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