New York C-stores Cheer Court Ruling on Indian Tax-Free Cigarette Sales

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New York C-stores Cheer Court Ruling on Indian Tax-Free Cigarette Sales

ALBANY, N.Y. -- Convenience stores in New York State cheered this week’s ruling by U.S. District Judge Carol Amon, which temporarily bars smoke shops on Long Island's Poospatuck Indian reservation from selling untaxed cigarettes to people outside the tribe.

But the New York Association of Convenience Stores (NYACS) turned the spotlight back onto Gov. David Paterson, who they said holds the key to solving the enormous loss of state tax revenue from continued Indian sales of cigarettes to non-Indian customers statewide.

NYACS claims rampant cigarette tax evasion—tacitly sanctioned by the Paterson administration—has destroyed mom-and-pop retail stores, deprived the state of $1 billion a year in desperately needed revenue and undermined the effectiveness of the state's anti-smoking efforts.
"Under the U.S. Supreme Court's unanimous Attea decision of 1994, New York has the right to collect these taxes," said NYACS President James Calvin.

"And under a law passed by the legislature and signed by then-Governor Pataki effective March 1, 2006, New York has the duty to collect these taxes. Why Governor Paterson refuses to enforce it in the face of a $3 billion budget deficit is a mystery for the ages."

A separate injunction imposed by State Supreme Court Justice Rose Sconiers currently prohibits Governor Paterson's tax department from enforcing the March 2006 tax collection law, but only until such time as the department issues the tax-exemption coupons prescribed by the law in order to preserve the undisputed tax exemption on tribal sales to other tribal members. "They claim they're enjoined, but the truth is they are enjoining themselves," said Calvin. "They have the coupons, and it's within their power to send the coupons to the tribes, rendering the injunction moot. They just refuse to act. It's mind-boggling."

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