ASSEMBLY, No. 1554

STATE OF NEW JERSEY

222nd LEGISLATURE

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman CLINTON CALABRESE

District 36 (Bergen and Passaic)

SYNOPSIS

     Increases presumed mark-up rate for retailer selling cigarettes.

CURRENT VERSION OF TEXT

     Introduced Pending Technical Review by Legislative Counsel.

An Act concerning the sale of cigarettes and amending P.L.1952, c.247.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

     1.    Section 4 of P.L.1952, c.247 (C.56:7-21) is amended to read as follows:

     a.  The term "cost to the retailer" shall mean the "basic cost of cigarettes" to the retailer plus the "cost of doing business by the retailer," as evidenced by the standards and methods of accounting regularly employed by him in his allocation of overhead costs and expenses, paid or incurred, and [must] shall include, without limitation, labor (including salaries of executives and officers), rent, depreciation, selling costs, maintenance of equipment, delivery costs, all types of licenses, taxes, insurance and advertising; provided, that any retailer who, in connection with the retailer's purchase, receives not only the discounts ordinarily allowed upon purchases by a retailer but also, in whole or in part, discounts ordinarily allowed upon purchases by a wholesaler shall, in determining "cost to the retailer," pursuant to this subsection, add the "cost of doing business by the wholesaler," as defined in section five of [this act] P.L.1952, c.247 (C.56:7-22), to the "basic cost of cigarettes" to said retailer, as well as the "cost of doing business by the retailer."

     b.  In the absence of the filing with the director of satisfactory proof of a lesser or higher cost of doing business by the retailer making the sale, the "cost of doing business by the retailer" shall be presumed to be [eight per centum (8%)] 16 percent of the "basic cost of cigarettes" to the retailer.

     c.  In the absence of the filing with the director of satisfactory proof of  a lesser or higher cost of doing business, the "cost of doing business by the retailer," who, in connection with the retailer's purchase, receives not only the discounts ordinarily allowed upon purchases by a retailer but also, in whole or in part, the discounts ordinarily allowed upon purchases by a wholesaler, shall be presumed to be [eight per centum (8%)] 16 percent of the sum of the "basic cost of cigarettes" and the "cost of doing business by the wholesaler."

(cf: P.L.1952, c.247, s.4)

     2.    This act shall take effect on the first day of the third month following enactment.

STATEMENT

     This bill amends the "Unfair Cigarette Sales Act of 1952" by increasing the presumptive "cost of doing business by the retailer" from eight percent to 16 percent of the "basic cost of cigarettes" to the retailer.  The bill raises the presumed mark-up margin required by retailers in connection with cigarette sales.

     The purpose of this bill is to modernize the calculation of retailers’ presumed operating costs, which have risen due to inflation and increased labor and overhead expenses.  It is the view of the sponsors that the updated percentage provides a more accurate basis for establishing minimum cigarette retail prices.