Update Liquor Tax Rules

Section 1. Section 420 of the tax law is amended by adding a new subdivision 17 to read as follows:

17. "Proof gallon" means one gallon of spirits that is fifty percent alcohol at sixty degrees Fahrenheit.

§ 2. Subdivision 1 of section 421 of the tax law, as amended by chapter 508 of the laws of 1993, is amended to read as follows:

1. General. The commissioner, upon the application of a distributor, shall register such distributor in suitable books to be kept by the department for that purpose, conditioned upon the obtaining of appropriate licenses pursuant to the alcoholic beverage control law, and the continuance of such license shall be a continuing condition of registration as a distributor under this article. The application shall be in a form and contain such data as the commissioner shall prescribe. No distributor, unless so registered, shall make any sale of alcoholic beverages within this state, except a sale, if any, as to which this state is without power to impose such condition. No person, unless so registered, shall (i) import or cause any liquors to be imported in this state for sale or use within this state, (ii) purchase a warehouse receipt and pursuant to such purchase then cause liquors covered by such receipt to be removed from a warehouse in this state or (iii) except in accordance with clause (i) or (ii) of paragraph (b) of subdivision four of section four hundred twenty of this article, produce, distill, manufacture, compound, mix or ferment any such liquors within this state for

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD07572-02-7

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sale. Provided, however, that the commissioner may exclude from registration requirements any person who is a distributor of liquors solely by reason of the importation into this state of no more than [ninety liters] twenty-four proof gallons of liquors during a one-year period for such person's personal use and consumption to register as a distributor with respect to liquor. Provided, further, that an abbreviated registration in the [from] form of a permit, without a bond, may be instituted by the commissioner for the purpose of authorizing the importation of up to [three hundred sixty liters] ninety-five proof gallons of liquors per year into this state by an individual for such individual's personal use and consumption in this state.

§ 3. Paragraphs (e), (f) and (g) of subdivision 1 of section 424 of the tax law, paragraph (e) as amended by chapter 190 of the laws of 1990, paragraph (f) and the opening paragraph of paragraph (g) as amended by chapter 508 of the laws of 1993 and paragraph (g) as amended by chapter 433 of the laws of 1978, are amended to read as follows:

(e) [Sixty-seven] Two dollars and fifty-three and six-tenths cents per [liter] gallon upon liquors containing not more than twenty-four per centum of alcohol by volume except liquors containing not more than two per centum of alcohol by volume, upon which the tax shall be [one cent] three and three-quarters cents per [liter] gallon; and

(f) [One dollar] Six dollars and [seventy] forty-three and one-half cents per [liter] proof gallon upon all other liquors; when sold or used within this state, except when sold or used under such circumstances that this state is without power to impose such tax or when sold to the United States and except beers when sold to or by a voluntary unincorporated organization of the armed forces of the United States operating a place for the sale of goods pursuant to regulations promulgated by the appropriate executive agency of the United States, to the extent provided in such regulations, directives and policy statements of such an agency applicable to such sales, and except when sold to professional foreign consuls-general, consuls and vice-consuls who are nationals of the state appointing them and who are assigned to foreign consulates in this state, provided that American consular officers of equal rank who are citizens of the United States and who exercise their official functions at American consulates in such foreign country are granted reciprocal exemptions; provided, however, that the commissioner may permit the sale of alcohol without tax to a holder of any industrial alcohol permit, alcohol permit or alcohol distributor's permit, issued by the state liquor authority, and by the holder of an alcohol distributor's permit, class A, issued by such authority to a holder of a distiller's license, class B, or a winery license, issued by such authority and may also permit the use of alcohol for any purpose other than the production of alcoholic beverages by such holders without tax; provided also that the commissioner may permit the sale of cider without tax by a holder of a cider producer's license issued by the state liquor authority to a holder of a cider producer's license or a cider wholesaler's license issued by such authority.

(g) For purposes of this chapter, it is presumed that liquors are possessed for the purpose of sale in this state if the quantity of liquors possessed in this state, imported or caused to be imported into this state or produced, distilled, manufactured, compounded, mixed or fermented in this state exceeds [ninety liters] twenty-four proof gallons. Such presumption may be rebutted by the introduction of substantial evidence to the contrary. In any case where the quantity of alcoholic beverages taxable pursuant to this article is a fractional

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part of one [liter] proof gallon (or one gallon in the case of beers) or an amount greater than a whole multiple of [liters] proof gallons (or gallons in the case of beers), the amount of tax levied and imposed on such fractional part of one [liter] proof gallon (or one gallon in the case of beers), or a fractional part of a [liter] proof gallon (or gallon) in excess of a whole multiple of [liters] proof gallons or gallons shall be such fractional part of the rate imposed by paragraphs (a) through (f).

Notwithstanding any other provision of this article, the tax commission may permit the purchase of liquors and wines without tax by a holder of a distiller's license or a winery license, issued by the state liquor authority from another holder of a distiller's license or a winery license, issued by such authority, in which event the liquors and wines so purchased shall be subject to the taxes imposed by this article in the hands of the purchaser in the same manner and to the same extent as if such purchaser had imported or caused the same to be imported into this state or had produced, distilled, manufactured, brewed, compounded, mixed or fermented the same within this state.

§ 4. Subdivision 4 of section 424 of the tax law, as amended by chapter 433 of the laws of 1978, is amended to read as follows:

4. [(a)] Notwithstanding any other provision of this article, there shall be exempt from the taxes imposed under this article, per month, one-quart of alcoholic beverages (or one gallon of such beverages in the case of a person arriving directly or indirectly from American Samoa, Guam or the Virgin Islands of the United States not more than one-quart of which shall have been acquired elsewhere than in such insular possessions):

[(i)] (a) purchased outside this state as an incident to a journey from which the purchaser is returning and

[(ii)] (b) not to be offered for sale or used for any commercial purpose, provided such alcoholic beverages accompany such person on his return to this state and provided, further, that in the case of a person arriving in this state from other than a state of the United States (including the district of Columbia), the Virgin Islands of the United States or a contiguous country maintaining a free zone or free port, such person shall have remained beyond the territorial limits of the United States for a period of not less than forty-eight hours.

[(b) Provided, however, where the amounts purchased outside this state or brought in exceed the amounts specified in paragraph (a) of this subdivision but are not in excess of one liter in the case of the references to one-quart or four liters in the case of the reference to one gallon, and where no duty is required by the laws of the United States to be paid on such amounts, such metric standards of fill shall be substituted for one-quart and one gallon, respectively, and such amounts shall be exempt from tax under the conditions provided for in paragraph (a) of this subdivision.]

§ 5. Section 425-a of the tax law, as added by chapter 508 of the laws of 1993, is amended to read as follows:

§ 425-a. Presumption of taxability. For the purpose of the proper administration of the taxes imposed by this article and to prevent evasion thereof, it shall be presumed with respect to this chapter that all alcoholic beverages possessed or found in this state are subject to the taxes imposed by this article until the contrary is established by substantial evidence. Except with respect to a purchase at retail of beers or wines and a purchase at retail of [ninety liters] twenty-four proof gallons or less of liquors, no person shall purchase alcoholic

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beverages in this state unless the taxes imposed by this article with respect to such beverages have been assumed by a distributor registered under this article or paid by such distributor pursuant to and in accordance with the manner provided herein and evidenced in accordance with the manner provided herein. In the case of liquors, such taxes shall be assumed by a distributor in accordance with the invoice required, and the certification of tax payment included therein, under section four hundred twenty-seven of this article; in the case of other alcoholic beverages, the taxes shall be assumed by such distributor pursuant to and in accordance with the rules or regulations of the department.

§ 6. Subdivision 1 and paragraph (i) of subdivision 2 of section 427 of the tax law, as added by chapter 508 of the laws of 1993, are amended to read as follows:

1. Every sale of liquors, except a sale at retail of [ninety liters] twenty-four proof gallons or less, shall be evidenced by and recorded on an individual, serially numbered invoice, and, with respect to each such sale, the seller therein shall make and complete such invoice which shall contain the information required by this section and give the same to the purchaser at the time of delivery. The seller shall sign and date the invoice required by this section and certify the entire content of such invoice.

(i) the [size (in liters)] volume per bottle and number of bottles of liquors sold, and its description, by brand name and price; and

§ 7. Subdivision 2 of section 428 of the tax law, as added by chapter 508 of the laws of 1993, is amended to read as follows:

2. The operator of a motor vehicle, as such term is defined in subdivision three of section two hundred eighty-two of this chapter, or any other means of transport of liquors in which more than [ninety liters] twenty-four proof gallons of liquors is being transported in this state must have in his or her possession a manifest, invoice or other document which shows the name and address of the person from whom such liquors were received and the date and place of receipt of such liquor and the name and address of every person to whom such operator is to make delivery of the same and the place of delivery, together with the number of [liters] bottles and volume per bottle to be delivered to each person, and, if such liquor is being imported into the state in such motor vehicle or such other means of transport, the name of the distributor importing or causing such liquors to be imported into the state and such other information as the commissioner may require pursuant to rule or regulation. Every operator of such motor vehicle or such other means of transport shall at the request of a peace officer, acting pursuant to his special duties, a police officer, any representative of the department or any other person authorized by law to inquire into or investigate the transportation of such liquors, produce such manifest, invoice or other document for inspection. The person causing the operation of such motor vehicle or such other means of transport shall be responsible to cause the operator to keep in such operator's possession in such motor vehicle or such other means of transport the manifest, invoice or other document required by this section. The absence of the manifest, invoice or other document required by this section shall give rise to a presumption that the liquors being transported are being imported or caused to be imported into this state for sale or use therein by other than a registered distributor. Moreover, the absence of (1) the place of delivery of liquors on the manifest, invoice or other document with respect to liquors being imported into the state shall give rise to a

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