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NY State Fails to Pass Native American Cigarettes Tax Laws
The Pataki administration has quietly let die a proposed regulation imposing the collection of taxes on the sales of cigarettes and gasoline to non-Indians by tribal retailers.

Despite being ordered to begin the collections under the terms of a 2003 state law, the state Tax Department has been telling local officials in recent days it will not enforce the law. The decision by Gov. George E. Pataki is a major win for Indian retailers, who will continue to enjoy a sizable pricing edge over non-Indian competitors.

The governor, who once favored the tax collections as a way to level the playing field between Indian and non-Indian retailers, has in recent years steadfastly opposed the tax efforts.

Instead, he has said "parity" deals, in which Indian retailers would raise the prices of cigarettes and gasoline, are a preferred route rather than trying to force collections on Indian tribes that have vowed to never pay the taxes; the parity deals, however, have not come to fruition.

Just last year, the tax department let die a set of rules ordered by the Legislature to begin taxing the Indian sales at the wholesale level -- an approach designed to bypass Indian retailers' refusal to collect the taxes.

The state charges $1.50 excise tax; New York City adds $1.50 on top of that. And then there are sales taxes. Indian retailers charge no taxes, which allows them to cut the price of a carton of cigarettes by half or more.

James S. Calvin, president of the New York Association of Convenience Stores, told The Buffalo News, "Up to now, in defiance of the state constitution, they have refused to execute that law. Perhaps this signals a long-overdue change in posture by the tax department. Time will tell if it's a sincere step towards tax fairness or a cynical ploy to prop up the governor's land-claim legislation."

There is uncertainty in some quarters over whether the new move to collect the taxes is real or just a negotiating tactic to use with the tribes, especially the Seneca Nation, that are trying to get state permission to locate a casino in the Catskills.
 

excerpt from KSSG News

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