Senecas Demonstrate Over Tax Collection

N.Y. tribe continues to resist cigarette laws

Published in CSP Daily News

BUFFALO, N.Y. -- Approximately 30 members of the Seneca Nation of Indians and supporters held a peaceful demonstration along the Thruway in Irving, N.Y., on the Cattaraugus Reservation late last week, reported WGRZ-TV in Buffalo, N.Y. They were protesting the renewed state effort to collect taxes on cigarettes sold to non-Native Americans in reservation smoke shops.

I'm supporting our people because [the state is] violating our rights, Seneca member Karen Jimerson told the news outlet.

The demonstrators' showed signs reading Honor [image-nocss] Indian Treaties, and Break the Treaty, Break the Law.

When the state attempted in 1997 to collect taxes on gas and cigarettes sold to non-Native Americans, the Senecas held protests that included burning tires and disrupting traffic on the Thruway. Since then, as reported in CSP Daily News, various deadlines to collect the tax have come and gone.

A new law went on the books March 1 aimed at collecting the tax from wholesalers, who would then pass increased costs onto Indian retailers.

State Attorney General Eliot Spitzer is warning wholesalers they must pay the tax on cigarettes sold to Native American businesses or face prosecution. As a result, Milhem Attea & Brothers, a Buffalo-based business that is a major supplier for smoke shops, stopped shipments to Native American shop owners this week, the report said.

A company spokesperson said it is suspending sales for a short time while their lawyers consider options. She said the company is specifically concerned about Spitzer's warnings. That is leaving Indian shops without their major supplier.

Wolf's Run owner William Parry said they will try to find supply at other places, wherever we can get it from. One option includes brands like Niagara's, which are made right on the reservation.

Parry said he has raised his prices in response to demand and recently increased prices from wholesalers. Customers told WGRZ that some shops have raised their prices by $6 a carton.

Because Native American smoke shops avoid state and local taxes, they can sell cigarettes much cheaper. One brand sold for about $25 a carton that customers said they would pay $60 for elsewhere, the report said.

While Indian retailers are dealing with keeping their shelves stocked, the debate about the tax collection is being renewed, added the report. State lawmakers said New York loses about $200 million a year by not collecting the tax, and that the price disparity is unfair to convenience stores and other business off reservations. They also believe a U.S. Supreme Court ruling supports the collection of the tax.

Joe Crangle, Counsel for the Seneca Nation of Indians, disagrees, saying that ruling deals only with wholesalers and does not include their dealings on reservations. Crangle said he believes the state cannot collect the tax, based on treaties and the constitution. The state has jurisdiction, to some extent, over any kind of a wholesaler that does business within New York State, but when that wholesaler is dealing with businesses on the Indian reservation, New York State hasn't got jurisdiction there, Crangle told the TV station.

He also said the tax cannot be collected because although it is now on the books, the regulations to enforce it have not been levied by Governor George Pataki, who is attempting to get its implementation delayed.

A spokesperson for Attorney General Spitzer said the law is in effect, whether or not the tax department is implementing it.

Seneca Nation President Barry Snyder did not participate in last Thursday's demonstration, but issued a statement saying the actions of Attorney General Spitzer to threaten and intimidate wholesalers is interfering with official state policy. He said the Senecas need to develop a protected source of tobacco products, and do more to protect its economy.