Senecas Pursue Tax Avoidance Plan

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Senecas Pursue Tax Avoidance Plan

ALBANY, N.Y. -- The Seneca Nation is preparing to create its own tobacco wholesale business to prevent the state from cracking down on untaxed Indian cigarette sales. The Seneca plan would keep the low cigarette prices at reservation stores about where they are now. It is unclear how gasoline prices would be affected.

Seneca leaders have been exploring wholesale options, including buying wholesale company, A.D. Bedell. The firm's top executives are facing trial next month on federal charges that they engaged in a massive tobacco smuggling operation, The Buffalo News reported.

The Seneca plan comes as a new state regulation is set to kick in Dec. 1, requiring cigarette wholesalers that supply Indian retailers to prepay the state taxes the Senecas have refused to collect from their customers.

The tribe is also exploring a Seneca tax stamp to be affixed to each pack of cigarettes sold at reservation stores. Cigarettes sold at Indian stores, unlike off-reservation retailers, have no tax stamp on them now, the report said.

Seneca negotiators met with Pataki administration tax officials a couple of weeks ago to discuss the idea. State officials said Friday the Dec. 1 implementation of the law could be pushed back if talks with tribes are progressing.