Federal law specifically requires all vendors who sell cigarettes over the Internet and by mail to register with the state tax administrator in any state that has a cigarette tax before they advertise or make any shipments to that state. These vendors are also required to report all sales and shipments to these states, and in the City's case, also report sales and shipments to New York City, to ensure that the cigarette tax is paid.
The cigarette tax should be paid by the vendor/distributor and passed along to the consumer in the cost of each pack of cigarettes. However, if the vendor/distributor hasn't paid the Cigarette Tax, the customer must do so. This is why it is the purchaser's responsibility to make sure that the appropriate tax stamp is present on every pack of cigarettes he or she buys.
Even if you buy cigarettes on which the tax has been paid, it is not legal to re-sell them in New York unless you have either a Wholesale Cigarette Vendor's License or a Retail Cigarette Vendor's License. Note that both the City and the State must license you to sell cigarettes.
Since 2006, the NYC Department of Finance has been engaged in an active campaign to educate the public about cigarette tax, bill and collect from those purchasing untaxed cigarettes and take legal action against those engaging in tax evasion and fraud.
If you received a letter from Finance, your name was on the purchase and shipping records of one of these companies selling untaxed cigarettes, and you are required to pay a Cigarette Tax. There is a Cigarette Tax Payment Form with the letter you received. If you submit a completed form and payment in full within 30 days of receiving the letter, Finance will not charge any interest or penalties on what you owe. You may also be eligible for an installment payment plan if you need one.