BUFFALO, New York - June 22, 2010 - Non-tribal people who buy cigarettes from Native American retailers in New York will have to pay taxes on those smokes under a measure approved yesterday - a move that will end an important source of income for some tribes.
Earlier, as the Legislature contemplated the move, J.C. Seneca, a Seneca Nation leader, said the tribe would regard it as “an act of war,” according to the Buffalo News’ Tom Precious. Seneca has called it “economic terrorism,” and some legislators worried about a “clash of cultures” and a backlash from tribes.
The move to raise taxes on all smokes, and to collect them on the tribal cigarettes, makes cigarette taxes in New York the highest in the nation, and will raise the cost of a pack of cigarettes to $9.20 a pack in the state, and more than $11 in New York City, which has its own taxes. More to the point, as far as New York state is concerned, it will add $440 million to the state’s short-of-cash coffers.
The legislation will permit the state to start collecting taxes on Indian cigarette sales on September 1, a move the state has threatened during the regimes of the past four governors. But critics said the bill includes a loophole to make it easier for Indian tribes, including the Seneca Nation, the nation’s largest Native American seller of tax-free cigarettes, to seek redress in federal courts.
The bill also does not end tax-free Indian sales of non-cigarette tobacco products, such as cigars, and also does not cover gasoline sales. It also could make it easier, and more lucrative with the hike in cigarette taxes, for Indian businesses to manufacture and sell tax-free their own brand of cigarettes, an increasingly popular route in New York.
The Seneca Nation has argued that the legislation could cost 3,000 tribal and nontribal jobs. A similar effort to collect the taxes in the 1990s resulted in sporadic violence as tribes shut down portions of the New York Thruway in protest.
“This is nothing less than a deliberate effort to sabotage our federal treaty rights and rape our economy to bail out New York State. Governor Paterson and members of the state legislature should be ashamed of themselves for looting our economy because they’ve squandered theirs through overspending and poor management,” Seneca President Barry Snyder Sr. said in a statement.
