Law requiring collection of cigarette taxes from Indian retailers kicks in, enforcement doesn't
Published in CSP Daily News
ALBANY, N.Y. -- Convenience store operators near Indian reservations and taxpayers statewide were expected to start missing out on millions of dollars in cigarette sales and tax revenue Wednesday as the state chooses not to enforce a new law, reported the Associated Press.
The George Pataki administration will not start enforcing the law that would require the collection of taxes on cigarettes before they reach the reservations. The retailers off reservation that are most affected are in the Buffalo, Niagara Falls and Salamanca areas, in Madison and [image-nocss] Oneida counties in central New York, along the Canadian border in the Franklin County area, and on Long Island near two reservations, according to the New York Association of Convenience Stores (NYACS).
State Tax Commissioner Andrew Eristoff said weeks ago that he would not enforce the law on reservation and Internet sales to non-Indians, instead waiting for Pataki to pursue other measures. That delay was rejected by the legislature.
An attempt to collect cigarette taxes resulted in violence in the 1990s involving tribes that cited a need to protect their sovereignty.
It is the executive branch's responsibility to enforce it, said Jim Calvin, president of NYACS. They are going to shirk their responsibility openly and defiantly just because they don't want to enforce it. That should shock and outrage every citizen in New York.... We are weighing our options.
In 2005, 9.5 billion packs of cigarettes were sold in New York state without being taxed or stamped. That was up from 4.3 billion in 2000. Estimates are the lost taxes to the state and New York City total about $300 million a year, while costing off-reservation retailers untold customers.
We know the governor respects our sovereignty and wants to do the right thing, said Barry Snyder, president of the Seneca Nation in western New York, which has substantial Internet sales. We need New Yorkers to support the governor and tell all of the state's elected leadership that they too should respect Indian sovereignty and honor Indian treaties.
Snyder said the tribe is committed to working as a partner with the state, where respect and peace equal prosperity for everyone. But if the state does not respect our treaties and our sovereignty, hundreds of Seneca-owned businesses would be forced to close, putting 1,000 Senecas and non-Senecas out of work. Doing so would wreak havoc on both the nation and western New York economy.
As written, the new law this time is aimed not at the tribeswhose leaders said they are shielded from collecting state taxes as sovereign nationsbut at the large commercial tax and stamping agents licensed by the state. The wholesalers are compelled by the law to stop selling untaxed, unstamped cigarettes to tribes. The Pataki administration's role under the law is to provide coupons, already printed, that would allow Indians to avoid taxes on the cigarettes they buy for their own personal use.
The law is now in effect, and tax stamping agents should think carefully about their actions, said Darren Dopp, spokesperson for state Attorney General Eliot Spitzer. If they violate this law, they may be subject to criminal sanctions brought by local district attorneys.
As the state's attorney, Spitzer can't compel the tax department to act, Dopp said.
NYACS, meanwhile, issued the following statement:
Pataki-ism Dawns in New York
Governor, Tax Department openly defy Constitution, refuse to enforce tax collection law
Wednesday, March 1, 2006 - New Yorkers awoke today to discover that their constitutional democracy has been replaced by new system of government called Pataki-ism, according to the New York Association of Convenience Stores.
Under Pataki-ism, there is a Legislature that makes the laws, but the elected chief executive gets to pick and choose which of those laws to enforce, said NYACS President James Calvin.
Today, March 1, is the effective date of a new state law Governor George Pataki himself signed requiring the state to collect taxes on Native American tribal sales of gasoline and cigarettes to non-Indian New Yorkers. However, Mr. Pataki administration has vowed not to enforce it.
Three times, the Governor has taken a solemn oath to faithfully execute all the laws of the State of New York, said NYACS President James Calvin. Yet here he is, openly defying the constitutional duties of the executive branch.
Pataki claims it would be premature to implement the law since the Legislature is still considering his budget recommendation that the effective date be delayed until March 1, 2007. The Legislature is not expected to finalize the budget until at least April 1, so even though legislative leaders have pledged to reject the extension request, their answer won't be official until then. The Governor is manipulating the budget process to justify further stalling, said Calvin.
NYACS leaders are exploring legal options to compel enforcement of the law.