New York Retailers Win New Freeze On Higher Tobacco Registration Fees

New York convenience store operators win temporary reprieve.

March 22, 2010

ALBANY, N.Y. - New York convenience store operators won a temporary reprieve on Friday, March 19, as the Appellate Division of State Supreme Court restored a restraining order once again blocking an enormous increase in the tobacco dealer registration fees they pay the state.

The TRO was signed one week after Justice Thomas Feinman alarmed the industry by reinstating the 900% to 4,900% increases in retail tobacco dealer registration fees enacted by Gov. David Paterson and the legislature last year.

Under that schedule, 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, Judge 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 TRO, "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.

"That means retailers should not pay any additional fee amount to the Tax Department until further notice," said James Calvin, president of the New York Association of Convenience Stores. "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.

Co-plaintiffs in the court action against Paterson are NYACS, the New York State Association of Service Stations and Repair Shops, Long Island Gasoline Retailers Association, Service Station Dealers of Greater New York, and the United 7-Eleven Franchise Owners of Long Island and New York. They are represented by the Long Island law firm of Forchelli, Curto, Deegan, Schwartz, Mineo, Cohn & Terrana.

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.

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