NY Lawmakers Seek To Tobacco Companies to Halt Tax-Free Cigarette Sales

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NY Lawmakers Seek To Tobacco Companies to Halt Tax-Free Cigarette Sales

ALBANY, N.Y.--In an effort to force Indian retailers to halt the sale of tax-free cigarettes, New York legislators are pushing to make it illegal for tobacco manufacturers to do business with wholesalers that don't charge taxes on cigarettes supplied to Indian merchants, reported BuffaloNews.com.

Frustrated by Gov. George E. Pataki's 10-year refusal to collect taxes on cigarettes sold by Indian retailers, lawmakers have introduced a bipartisan measure in the Assembly and State Senate that largely would remove collecting the tax from the hands of the governor and make it more a matter for law enforcement, according to the report.

Targeting large tobacco companies would be an effective and simple way of cutting off the supply of tax-free tobacco products to Indian retailers, reported BuffaloNews.com.

Lawmakers said in the report the state's failure to collect the $1.50 per pack excise tax on reservation sales costs the state $400 million a year.

Officials of the Seneca Nation of Indians maintain that treaties dating back two centuries protect them from taxation.

The legislation was proposed after the state Department of Taxation and Finance refused to start collecting the tobacco tax March 1, as required by a law enacted last year.

All sides seem to believe that Pataki does not intend to collect the tax--and risk another round of violence on reservations like the Senecas, according to the report.

The proposed legislation would end what had been an attempt to target wholesalers--the middlemen in the tobacco distribution chain who purchase cigarettes from manufacturers and sell them to retailers, including Indian-run businesses, reported BuffaloNews.com.

Officials with Philip Morris and RJR, the nation's biggest tobacco companies, said in the report they were reviewing the new bill and would not comment.

James Calvin, executive director of the New York Association of Convenience Stores, said in the report his group is open to what he described as "a creative approach" to ending the stalemate over collecting the taxes.

"It's just unfortunate that something like this needs to be considered when the easiest, most direct, best answer to this situation is for the governor to enforce the existing law," he told BuffaloNews.com.