N.Y. Indian Tribes Vow to Fight Cigarette Tax Bill

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N.Y. Indian Tribes Vow to Fight Cigarette Tax Bill

BUFFALO, N.Y. – December 22, 2008 -- Indian tribal leaders will fight a new bill signed by state Governor David Paterson that would require cigarette manufacturers and stamping agents to be accountable for sales of untaxed cigarettes by Indians to non-Indians, Indian Country Today reported.

"Our position is very simple and it is simply this: We cannot be compelled or forced or coerced or threatened to collect New York state taxes without our consent," Harry Wallace, chief of the Unkechaug Indian Nation, told the paper. "Nothing that they do will ever achieve that goal."

The law would require stamping agents to provide a certificate to both the cigarette manufacturer and the state’s Department of Finance and Taxation that the cigarettes being sold are taxed appropriately.

Unkechaug would "definitely" be affected by the new law if it were to be implemented, Wallace said. The nation has 12 retailers who sell directly to customers, and Wallace runs a smoke shop that employs 18 people, the report stated.

"We have to explore all possible avenues and litigation is one of them," Wallace said.

The state’s tax department has 60 days to issue a certification form and prepare to receive certifications that will be submitted, according to a press release by the governor, which was cited by the paper.

However, the tribes are not likely to submit certifications soon, said attorney Thomas Moll, who represents the Seneca Free Trade Association, an alliance of more than 230 Seneca Licensed businesses.

"I assure you that no Indian wholesaler or stamping agent will provide any type of certification to New York state," Moll told Indian Country Today, adding the nations are not prohibited from purchasing tobacco products from other sources, and will likely do so.

"I expect Indian wholesalers and stamping agents to utilize their contacts across the country to fulfill their tobacco needs. I do not think Haudenosaunee Indian Nations, like the Seneca Nation, are legally required to purchase their cigarettes and/or tobacco products from New York state wholesalers/stamping agents," Moll told the newspaper.

Moll added the $62 million a year or more that could be generated with the tax is "grossly over exaggerated."

Seneca Nation President Barry Snyder said at issue is the protection of treaty rights. The governor’s action "is a threat to the Seneca Nation and we have no choice but to explore all of our options," Snyder told the paper.