NY Governor Signs Bill to Tax Cigarettes Sold by Seneca Nation

Taxation to begin on reservations within 60 days
by Sharon Turano
The Observer: December 16, 2008

Seneca Nation of Indians officials will detail their response to Gov. David Paterson's decision to collect sales tax on cigarettes sold to non-Indians during a news conference at 11 a.m. today.

''The Seneca Nation of Indians will explore all of its options,'' report nation officials, who said the law threatens the nation's treaty rights and 1,000 retailing jobs in Western New York.

''This action is a threat to the Seneca Nation, and we have no choice but to explore all of our options,'' said Barry E. Snyder Sr., Seneca Nation president.

''Attacking tax-free commerce in our territories is short-sighted and disastrous for us and all of Western New York. The nation has a complicated and intertwined relationship with the state. Since this is the direction that the governor wants to take things, then we have no choice but revisit every aspect of our relationship with the state.''

''The issue here is not cigarettes, but the protection of the nation's treaty rights. We will do what it takes at the right time to protect those rights,'' said Snyder.''Because our Nation believes that diplomacy is always the best path when governments are in dispute, I have invited Governor Paterson to our historic territory to discuss how this problem can be resolved in a matter respectful of our treaties,'' said President Snyder.

GOV. PATERSON'S DECISION

Paterson also listed his reasons for signing the bill into law.

''Cigarettes sold by Indian retailers to non-Indians must be taxed,'' a news release from Paterson said.

Under the law, those selling cigarettes to retailers must provide the state tax department with certification the cigarettes will not be resold to untaxed retailers to resell without collecting taxes on the products. The state Department of Taxation will have 60 days to issue a certification form and prepare to receive the certifications that will be submitted.

Under the law, tax law violators are subject to revocation or cancellation of its license. A false certificate could be referred to a district attorney's office for prosecution for perjury or filing a false instrument.

''This law has not been adequately applied for far too long giving non-Indians easy access to tax-free cigarettes both on the reservations and over the internet,'' Paterson said. ''However, the signing of this bill should not be seen as anything other than enforcing the tax laws of New York in a fair and effective manner. My commitment to the sovereign powers of New York's Indian Nations has not and will not waver and I will continue to seek a comprehensive negotiated solution with all of New York's Indian nations.''

Although cigarettes sold by agents to retailers for re-sale to non-Indian purchasers must bear tax stamps, the state has, for many years, adopted a policy of non-enforcement, and unstamped cigarettes continue to be sold by agents to Indian retailers who sell them to non-Indians at discount prices, his press release states.

''Tomorrow, I will present my 2009-2010 budget proposal and while we will continue to aggressively and responsibly address New York's current budget crisis, this bill is not only about collecting revenue for the state of New York, it is also about protecting the health of our citizens. Smoking has long been a tragic public health crisis in New York and around the world,'' Paterson said.

He said cigarette taxes have been one of the state's most effective tools in addressing this crisis.

''To the extent that the tax is undermined, our efforts to fight smoking are also undermined,'' Paterson said.

GROUPS PICKING SIDES

Bills that state tobacco manufacturers can't sell untaxed cigarettes to retailers for resale were passed by the state Assembly and Senate over the summer and were awaiting the governor's signature to become law.

''I urge the governor and the Seneca Nation to undertake discussions to find a peaceful and productive resolution to their differences,'' said state Sen. Catharine Young, R-Olean.

''I am disappointed that Governor Paterson has signed this legislation without further negotiation with the Seneca Nation of Indians,'' said state Assemblyman Joe Giglio, R-Gowanda. ''I believe that this is a complicated issue, and negotiations among the involved parties should take place prior to the effective date of this legislation.''

Convenience store lobbies, such as the New York State Association of Convenience Stores, have requested taxes be collected.

''In the quest for tax fairness, this would be a step in the right direction,'' said James Calvin, executive director of the association about the governor signing the bill into law,'' he said.

Members of the Seneca Free Trade Association, a private-non-profit cooperative assoication of individuals and businesses licensed by the Nation to develop commerce and industry within and around Nation territories, could not be reached to comment Monday.

They previously called on the public to ask Paterson to veto the bill.

''We are both saddened and angered by the continued attacks upon our indigenous rights and sovereignty by narrow-minded New York politicians and government officials,'' they wrote in a letter seeking support for a veto. They called the legislation ''a misguided assault upon Seneca Indian sovereignty.

''Because tobacco and the trade of tobacco have long been an integral part of our Seneca culture and heritage, we view this recent effort by the New York Legislature as a direct, discriminatory attack on the Seneca people,'' they said. ''Seneca Indian business owners have no intention of helping New York's incompetent bureaucrats close their state's budget deficit, which has been created by their misspending and mismanagement of your tax dollars.''

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© 2008 The Observer

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