March 23, 2010 - On March 12, 2010, State Supreme Court Justice Thomas Feinman reinstated an increase in the retail tobacco dealer registration fees enacted by Governor David Paterson and the legislature last year. Under the law, convenience store operators who previously paid $100 annually now face registration fees of $1,000 to $5,000 per location per year, based on the store's annual gross sales of all products -- a 900-percent to 4,900-percent hike, according to the New York Association of Convenience Stores (NYACS). (Judge Confirms New York Tobacco Retail Fee Hikes, Convenience Store New, 3/15/2010)
On March 19 convenience store operators in the state of New York won a temporary reprieve as the Appellate Division of the State Supreme Court restored a restraining order once again blocking an enormous increase in the tobacco dealer registration fees they pay the state, according to the New York Association of Convenience Stores (NYACS).
Under the increase in the retail tobacco dealer registration, 24,000 retailers who in the past paid $100 annually would instead face registration fees of $1,000 to $5,000 per location per year depending on their annual gross sales of all products.
In a legal challenge filed by five retail trade associations, Feinman had issued a temporary restraining order last September pending his ruling on their motion for a more permanent freeze. On March 12, without ruling on the merits, he declared the trade groups lacked "standing" to bring the action, denying the motion and reinstating the new fee schedule.
The trade associations filed an immediate appeal, and on Friday, Appellate Division Associate Justice John Leventhal restored the order, "staying" enforcement pending a decision on their new motion for a preliminary injunction, a process expected to take at least four to six weeks. A hearing is scheduled for March 31. (In New York's civil court system, the Supreme Court is the lowest level, the Appellate Division the middle level, and the Court of Appeals the top level.)
"That means retailers should not pay any additional fee amount to the Tax Department until further notice," said James Calvin, president of NYACS. "The $100-a-year fee remains in effect. Don't let anyone tell you differently."
In the meantime, the trade associations continue to lobby the state Legislature to approve the more modest fee increase proposed by state Senator William Stachowski and Assembly William Magee. It would set the fee at $200 per store plus a $100 surcharge for each active point on the store's tobacco enforcement record, to a maximum $400 fee per store per year.
Reference: N.Y. Retailers Win New Freeze on Higher Tobacco Registration Fees $100-a-year fee remains in effect after challenge leads to temporary reprieve, Convenience Store/Petroleum (CSP) Daily News, 5/23/2010.
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