What's happening
This bill allows the state and New York City to offer monetary rewards for information leading to enforcement actions against cigarette tax violations.
Why it matters
Encourages whistleblowing against cigarette tax fraud. by offering monetary rewards, which could increase reporting of illegal activities like tax evasion, smuggling, and unauthorized sales.
Directly ties reward payments to successful enforcement outcomes. , such as detection of tax underpayments, convictions, seizures, or license revocations, ensuring rewards are only given when actionable results are achieved.
Limits the reward amount to generally no more than 15% of collected proceeds. (excluding interest), aligning incentives for informants without excessively diverting recovered funds from public use.
Empowers both state and New York City authorities with discretionary power. to approve rewards, allowing flexibility in how and when informants are compensated based on the significance of their information and the outcomes it produces.
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Who cares
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Pay Rewards for Cigarette Tips
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to ways and means
- Delivered to assembly
- Passed senateVote 45–17
- Ordered to third reading cal.1841
- Committee discharged and committed to rules
- Reported and committed to finance
- Referred to cities
- Referred to cities
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Reward Whistleblowers for Cigarette Tax
In Assembly Committee · Ways And Means · Sponsor Jeffrey Dinowitz
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5886
2017-2018 Regular Sessions
IN SENATE
May 4, 2017
Introduced by Sen. GOLDEN -- read twice and ordered printed, and when printed to be committed to the Committee on Cities
AN ACT to amend the administrative code of the city of New York and the tax law, in relation to authorizing the payment of rewards in connection with the enforcement of the cigarette tax
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 11-1308 of the administrative code of the city of New York is amended by adding a new subdivision 12 to read as follows:
12. In his or her sole discretion, to approve a reward, in a suitable amount, for information that leads to (i) the detection of underpayments of tax or fees required to be paid under this chapter, (ii) the detection of and assessment of penalties on persons violating or conspiring to violate any provision of this chapter, (iii) the detection and conviction under chapter forty of this title of persons guilty of violating or conspiring to violate any provisions of this chapter, (iv) a seizure and forfeiture of cigarettes under section 11-4021 of this title, or (v) a suspension or revocation of a license issued under this chapter. The rewards provided for by this subdivision will be paid from the proceeds of amounts (other than interest) collected in connection with the administration of this chapter and sections 11-4007, 11-4008, 11-4009, 11-4012 and 11-4021 of this title by reason of the information provided. For purposes of this subdivision, proceeds of amounts (other than interest) collected in connection with the administration of this chapter and sections 11-4007, 11-4008, 11-4009, 11-4012 and 11-4021 of this title because of the information provided include both additional amounts collected and amounts collected prior to receipt of the information if the information leads to the denial of a claim for refund that otherwise would have been paid. A "suitable amount" for purposes of this subdivision will depend on the facts and circumstances, but generally
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11393-01-7
S. 5886 2
will not exceed fifteen percent of the amount (other than interest) collected by reason of the information provided.
§ 2. The tax law is amended by adding a new section 479-a to read as follows:
§ 479-a. Reward for detection of cigarette tax fraud. The commissioner may, in his or her sole discretion, approve a reward, in a suitable amount, for information that leads to (1) the detection of underpayments of tax or fees required to be paid on cigarettes under this article, (2) the detection of and assessment of penalties on persons violating or conspiring to violate any provision of this article pertaining to the cigarette tax, (3) the detection and conviction of persons guilty of violating or conspiring to violate any provisions of this article pertaining to the cigarette tax, (4) a seizure and forfeiture of cigarettes under this article, or (5) a suspension or revocation of a license issued under this article. The rewards provided for by this section will be paid from the proceeds of amounts (other than interest) collected in connection with the administration of this article and forfeitures by reason of the information provided. For purposes of this section, proceeds of amounts (other than interest) collected in connection with the administration of this article and forfeitures because of the information provided include both additional amounts collected and amounts collected prior to receipt of the information if the information leads to the denial of a claim for refund that otherwise would have been paid. A "suitable amount" for purposes of this section will depend on the facts and circumstances, but generally will not exceed fifteen percent of the amount (other than interest) collected by reason of the information provided.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the administrative code of the city of New York and the tax law, in relation to authorizing the payment of rewards in connection with the enforcement of the cigarette tax
Purpose or general idea of bill
To curb cigarette tax evasion by allowing the New York City Department of Finance and the Department of Taxation and Finance to provide suitable rewards to those providing information leading to violations of the tax on cigarettes.
Summary of specific provisions
Section 1 of the bill amends Section 11-1308 of the Administrative Code of the City of New York to add a new subdivision 12 authorizing the Commissioner of Finance to approve suitable rewards for information that leads to the detection of violations of the tax on cigarettes authorized by Chapter 13 of title 11 of the administrative code.
Such rewards are to be payable from amounts (exclusive of interest)collected by the Department of Finance in connection with enforcement of Chapter 13 and Sections 11-4007, 11-4008, 11-4009, 11-4012 and 11-4021 of title 11 by reason of the information provided. Section 1 further provides that, in general, a suitable reward will not exceed fifteen percent of amounts collected (other than interest) based on the information provided.
Section 2 of the bill adds a new section 479-a of the tax law authorizing the Commissioner of the Department of Taxation and Finance to approve similar rewards at the State level for violations of provisions of Article 20 of the Tax Law.
Section 3 of the bill provides for an immediate effective date
Justification
This bill enhances the New York City Department of Finance's and the State Department of Taxation and Finance's ability to collect the City's and State's cigarette taxes. The unlawful sale of untaxed cigarettes has become a serious problem in New York City the state. The increase in the New York State and New York City cigarette taxes have led to increased efforts to avoid payment of lawfully imposed and due cigarette taxes. At present, and estimated $2.5 billion a year in lawfully required taxes are not being collected by the state and city due to avoidance of cigarette taxes and due sales taxes. Enabling the state and city to reward individuals who provide information that leads to the detection of violations of the tax would be a major new and valuable enforcement tool. Increased detection of cigarette tax avoidance is estimated to significantly bolster New York State and City cigarette and sales tax collections leading to a major new source of revenue for underfunded New York State and New York City health programs.
Prior legislative history
New bill.
Fiscal implications
Estimated to increase state and city tax collections by hundreds of millions of dollars annually. EFFECTIVE DATE : This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.