N.Y. Tax Law 485 – Determination of cost of agent, retail dealer or wholesale dealer
§ 485. Determination of cost of agent, retail dealer or wholesale dealer. (a) 1. In determining "cost of the retail dealer", "cost of the agent" and "cost of the wholesale dealer" the tax commission or a court shall receive and consider as bearing on the bona fides of such cost, evidence tending to show that any such person complained against under any of the provisions of this article purchased cigarettes, with respect to the sale of which complaint is made, at a fictitious price, or upon terms, or in such a manner, or under such invoices, as to conceal the true costs, discounts or terms of purchase, and shall also receive and consider as bearing on the bona fides of such cost, evidence of the normal, customary and prevailing terms and discounts in connection with other sales of a similar nature in the trade area or state.
Terms Used In N.Y. Tax Law 485
- Basic cost of cigarettes: shall mean the invoice cost of cigarettes to the agent who purchases from the manufacturer, or the replacement cost of cigarettes to the agent, in the quantity last purchased, whichever is lower, less all trade discounts, except discounts for cash, to which shall be added the full face value of any stamps which may be required by law. See N.Y. Tax Law 483
- Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
- cost of the agent: shall mean the basic cost of cigarettes plus the cost of doing business by the agent as evidenced by the accounting standards and methods regularly employed by said agent in his determination of costs for the purpose of federal income tax reporting for the total operation of his establishment, and must include, without limitation, labor, including salaries of executives and officers, rent, depreciation, selling costs, maintenance of equipment, delivery costs, interest payable, all types of licenses, taxes, insurance and advertising expressed as a percentage and applied to the basic cost of cigarettes. See N.Y. Tax Law 483
- cost of the retail dealer: shall mean the basic cost of cigarettes plus the cost of doing business by the retail dealer as evidenced by the accounting standards and methods regularly employed by said retail dealer in his determination of costs for the purpose of federal income tax reporting for the total operation of his establishment, and shall include, without limitation, labor, including salaries of executives and officers, rent, depreciation, selling costs, maintenance of equipment, delivery costs, interest payable, all types of licenses, taxes, insurance and advertising expressed as a percentage and applied to the basic cost of cigarettes, plus the cost of doing business by the agent with respect to sales of cigarettes to retail dealers. See N.Y. Tax Law 483
- cost of the wholesale dealer: shall mean the basic cost of cigarettes plus the cost of doing business by the wholesale dealer as evidenced by the accounting standards and methods regularly employed by said wholesale dealer in his determination of costs for the purpose of federal income tax reporting for the total operation of his establishment, and must include, without limitation, labor, including salaries of executives and officers, rent, depreciation, selling costs, maintenance of equipment, delivery costs, interest payable, all types of licenses, taxes, insurance and advertising expressed as a percentage and applied to the basic cost of cigarettes, plus the cost of doing business by the agent with respect to sales of cigarettes to wholesale dealers. See N.Y. Tax Law 483
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- Retail dealer: means any person engaged in selling cigarettes at retail, and shall include a chain store, a wholesale dealer or an agent for purposes of its sales of cigarettes to consumers. See N.Y. Tax Law 483
- Wholesale dealer: shall mean any person, other than an agent, who sells cigarettes to retail dealers or other persons for purposes of resale only and who maintains a separate warehousing facility for the purpose of receiving and distributing cigarettes and conducting its wholesale business. See N.Y. Tax Law 483
2. Merchandise given gratis or payment made to an agent, retail dealer or wholesale dealer by the manufacturer thereof for display, or advertising, or promotion purposes, or otherwise, shall not be considered in determining the cost of cigarettes to the agent, retail dealer or wholesale dealer.
(b) In all advertisements, offers for sale or sales involving two or more items, at least one of which items is cigarettes, at a combined price, and in all advertisements, offers for sale, or sales involving the giving of any gift or concession of any kind whatsoever (whether it be coupons or otherwise), the agent's, retail dealer's or wholesale dealer's combined selling price shall not be below the cost of the agent, the cost of the retail dealer or the cost of the wholesale dealer, respectively, of the total costs of all articles, products, commodities, gifts and concessions included in such transactions.
(c) When one wholesale dealer sells cigarettes to any other wholesale dealer, the former shall not be required to include in his selling price to the latter, the cost of the wholesale dealer, as defined by paragraph two of subdivision (b) of section four hundred eighty-three of this article, except that no such sale shall be made at a price less than the cost of the agent for sales to wholesale dealers as defined by paragraph one of subdivision (b) of section four hundred eighty-three of this article, but the latter wholesale dealer, upon resale to a retail dealer, shall be deemed to be the wholesale dealer governed by the provisions of paragraph two of subdivision (b) of section four hundred eighty-three of this article.
(d) When one agent sells cigarettes to any other agent, the former shall not be required to include in his selling price to the latter, the cost of the agent, as defined by paragraph one of subdivision (b) of section four hundred eighty-three of this article, except that no such sale shall be made at a price less than the basic cost of cigarettes, as defined by paragraph one of subdivision (a) of section four hundred eighty-three, but the latter agent, upon resale of such cigarettes, shall be deemed to be the agent governed by paragraph one of subdivision (b) of section four hundred eighty-three of this article. Cigarettes sold by an agent to an agent must be picked up at the warehouse of the selling agent, or delivered to the warehouse of the purchasing agent.