New York – Truck and Load Seized for Untaxed Cigarettes State Court Ruling

SALT Report 3130 – The State of New York Supreme Court, Appellate Division Third Judicial Department issued a ruling 10/24/2013 in the Matter of “HCI Distribution, Inc. V. New York State Police, Troop B Commander” regarding the seizure of a truck and its contents.  According to Associated Press “The Appellate Division said it didn’t reach any conclusion about whether the cigarettes should ultimately be taxed or not, only that State Police didn’t exceed their authority in seizing the shipment at prosecutors’ request”.  HCI Distribution, Inc. provided the court with shipping documents (Bills of Lading) showing that the destination was out of state but, according to the NY Court decision, “(HCI) has produced no evidence that the cigarettes would not be reintroduced into the state.”  This decision leaves open an appeal by HCI Distribution, Inc. to New York’s’ highest court.

Certificates – The case further highlights the importance of collection, retention and ability to retrieve exemption certificates.  HCI case relies on regulations stating that no tax may be imposed on an out-of-state buyer, however, the regulation further requires that a certificate be collected from the purchaser supporting the exemption circumstances.


For Further Information: – Associated Press: NY Court Upholds Police Seizure of Untaxed Cigarettes from St. Regis Mohawk Reservation

NY Courts Appellate Division Third Judicial Dept. Decision 516040 Matter of HCI Distribution, Inc. v New York State Police, Troop B Commander

N.Y. TAX. LAW § 1814 : NY Code – Section 1814: Cigarette and tobacco products tax

N.Y. TAX. LAW § 471-b : NY Code – Section 471-B: Imposition of tobacco products tax