NY A03234

Requires the Department of Taxation and Finance to implement an encrypted tax stamp system for cigarettes that identifies the stamping agent, date affixed, and stamp value with at least four layers of security data.

Mandates tax stamps be produced in secure facilities certified to American National Standards Institute and North American Security Products Organization standards, applied by machines that capture encrypted data instantly, and readable by state enforcement scanning devices.

Authorizes the Commissioner to provide stamping agents an additional commission beyond the standard 5% to offset costs of leasing or purchasing machinery required to apply the new encrypted stamps.

Requires the Department to issue a request for proposals within 90 days, receive bids within 60 days, award contracts within 90 days of bid receipt, and complete system installation within 180 days of contract award.

Allows cigarette retailers to continue selling existing stamped inventory on hand at the effective date, and requires annual reporting to the legislature and governor on the system's effectiveness.