New York excise tax rates vary by product and are paid by distributors or wholesalers rather than collected at the register: $0.14 per gallon on beer, $1.70 per liter on liquor over 24% alcohol, $5.35 per pack of 20 cigarettes, 75% of wholesale price on most other tobacco, $0.08 per gallon on motor fuel and diesel (before the petroleum business tax and prepaid sales tax stack on), 9% at each of the distributor and retail levels on adult-use cannabis, and a combined 6% on peer-to-peer car sharing. Every one of these is administered by the New York Department of Taxation and Finance, and every one has its own registration form, filing cadence, and penalty schedule.
Alcoholic Beverages
Article 18 of the Tax Law taxes the first sale or use of alcohol in New York. Registered distributors and noncommercial importers pay:
- Beer: $0.14 per gallon
- Still wine up to 24% alcohol: scaled by alcohol content, starting at $0.05 per liter for the lowest tier
- Liquor over 24% alcohol: $1.70 per liter
The tax is triggered on that initial transaction, not on each subsequent resale.1New York State Senate. New York Tax Code 424 – Taxes Imposed
Distributors delivering to licensed premises in the five boroughs of New York City owe an additional city-level excise: $0.12 per gallon on beer and $0.67 per liter on liquor over 24% alcohol, on top of the state rate.2Cornell Law Institute. N.Y. Comp. Codes R. and Regs. Tit. 20 Section 66.1 – Application of the New York City Beer and Liquor Taxes
Cigarettes, Other Tobacco, and Vapor
Article 20 puts New York among the highest-taxing states for cigarettes. The state excise tax is $5.35 per pack of 20 cigarettes. Other tobacco products are taxed by wholesale price or weight:
- Cigars and most tobacco products: 75% of the wholesale price
- Little cigars: $0.2675 each
- Snuff, 1 oz. or less per container: $2.00 per container
- Snuff, over 1 oz.: $2.00 per ounce, prorated for partial ounces (so a 1.25-ounce container carries a $2.50 tax)
Vapor products carry a 20% supplemental tax on retail sales of noncombustible liquids and gels intended for electronic cigarettes and similar devices. It sits under Article 28-C and runs alongside ordinary sales tax.4New York State Department of Taxation and Finance. Vapor Products
Motor Fuel and Diesel
Article 12-A imposes an $0.08-per-gallon excise on both motor fuel and diesel, paid by registered distributors when fuel is produced in or imported into New York.5New York Codes, Rules and Regulations. 20 CRR-NY 534.1 – Tax on Motor Fuel That $0.08 is only the Article 12-A component. Fuel distributors also owe the petroleum business tax under Article 13-A and prepaid sales tax, and the state can seize untaxed fuel and revoke a distributor’s registration for noncompliance.6New York State Department of Taxation and Finance. Motor Fuel Excise Tax Federal excise adds another $0.184 per gallon on gasoline and $0.244 per gallon on highway diesel.
Adult-Use Cannabis
Article 20-C taxes adult-use cannabis at two levels: 9% when a distributor sells to a retailer, and 9% when the retailer sells to the consumer.7New York State Department of Taxation and Finance. Summary of 2024 Sales and Other Tax Type Changes This flat structure replaced the original THC-potency tax effective June 1, 2024. Microbusinesses and registered organizations that both distribute and sell at retail apply the distributor-level 9% to 75% of the retail sale price rather than to a separate wholesale transaction.
Peer-to-Peer Car Sharing
Article 28-D, effective September 2022, taxes gross receipts from peer-to-peer car-sharing at 3% statewide.8New York State Senate. New York Tax Code 1191 – Imposition of State-Wide Peer-to-Peer Tax An additional 3% applies based on the pickup location: a regional transportation tax outside the Metropolitan Commuter Transportation District, or an MCTD tax inside it. Either way, the combined rate on the driver’s payment is 6%.9New York State Department of Taxation and Finance. New York State Tax Law Article 28-D – Special Taxes on Peer-to-Peer Car Sharing
Registering as a Distributor
You can’t file an excise return until the department has you on its rolls as a distributor. Each product line has its own form. Alcohol distributors use Form TP-215, which covers liquor, beer, wine, cider, and direct shipping.10New York State Department of Taxation and Finance. Instructions for Form TP-215 Application for Registration as a Distributor of Alcoholic Beverages Motor fuel and diesel distributors use Form TP-650.6New York State Department of Taxation and Finance. Motor Fuel Excise Tax Cannabis operators are licensed first through the Office of Cannabis Management and then register separately with the Department of Taxation and Finance for tax purposes.
A distributor whose business also makes taxable retail sales needs a Certificate of Authority for sales tax collection in addition to the excise registration. They cover different obligations: excise at the wholesale layer, sales tax at the register.11New York State Department of Taxation and Finance. How to Register for New York State Sales Tax
Motor fuel applicants in particular should expect a surety bond requirement. The minimum is $50,000 for a distributor whose net worth covers six months of projected tax liability; if financials are thinner, the bond scales up to fill the gap, and the department can raise it later.12Cornell Law Institute. N.Y. Comp. Codes R. and Regs. Tit. 20 Section 411.2 – Distributors Bond Requirements
Filing Returns and Making Payments
Excise returns are filed electronically through the Department of Taxation and Finance’s Business Online Services portal, which also lets you verify liabilities and view filing history.13New York State Department of Taxation and Finance. Online Services for Businesses
Frequency depends on the product. Most alcohol distributors file monthly, with the return and payment due by the 20th of the following month. Smaller alcohol operations that meet certain thresholds and aren’t also licensed as wholesalers can elect annual filing, due January 20 of the next calendar year. Cider distributors default to annual filing unless they also distribute other alcohol, in which case everything goes on the monthly schedule.14New York State Department of Taxation and Finance. Alcoholic Beverages Tax Motor fuel follows a similar monthly cycle. Keep the confirmation number from every submission; it’s your proof of filing if the department follows up.
PrompTax for High-Volume Filers
Large filers get pulled into the PrompTax program, which requires accelerated electronic payments. The threshold is $5 million in annual liability for prepaid sales tax on motor fuel and diesel, and $5 million for petroleum business tax. Failing to enroll when required is a $5,000 penalty, plus $500 for each additional month of noncompliance.15New York State Department of Taxation and Finance. PrompTax Program
Penalties and Interest
Late filing carries a 10% penalty if the return is no more than one month late, with 1% added for each additional month or partial month, capped at 30%.16New York Codes, Rules and Regulations. 20 CRR-NY 536.1 – Penalties and Interest Motor fuel distributors caught with untaxed fuel owe twice the unpaid tax, and cigarette retailers in the same situation face the same doubling.
Interest runs on top of the penalty and is reset quarterly. For the first quarter of 2026, the annual rate on underpayment is 11% for alcohol, cigarettes, tobacco products, motor fuel, diesel, and petroleum business tax, and 14.5% for adult-use cannabis.17New York State Department of Taxation and Finance. Interest Rates 1/01/2026 – 3/31/2026 Check the department’s site for the current quarter’s figures before calculating what you owe on a late payment.
Retain returns, invoices, shipping documents, and inventory records for at least three years, longer if there’s any chance your filings will be questioned.
The Federal Layer
State registration does not cover federal obligations. Any business that manufactures, imports, or wholesales alcohol or tobacco needs approval from the federal Alcohol and Tobacco Tax and Trade Bureau before opening. TTB permits are free but must be in hand before you start operating, and applications go through the TTB’s Permits Online system.18TTB: Alcohol and Tobacco Tax and Trade Bureau. Applying for a Permit and/or Registration Federal excise is reported quarterly on IRS Form 720, and if quarterly liability exceeds $2,500, semi-monthly deposits through the Electronic Federal Tax Payment System may be required. State and federal deadlines run on separate calendars, so the same batch of product can generate two filings with two different due dates.
Cannabis: Section 280E Still Bites
One federal issue is unique to cannabis. Internal Revenue Code Section 280E bars businesses trafficking in Schedule I or II controlled substances from deducting ordinary operating expenses. In April 2026, certain cannabis categories were rescheduled from Schedule I to Schedule III, but only FDA-approved cannabis drug products and marijuana distributed under a state medical license are covered. Recreational cannabis remains on Schedule I, so New York adult-use distributors and dispensaries still cannot deduct rent, payroll, or most operating expenses federally.19Federal Register. Schedules of Controlled Substances – Rescheduling of Food and Drug Administration Approved Products Effective federal tax rates on adult-use cannabis operators can exceed 70%. Talk to a tax professional before projecting profitability in this market.