Clouds of smoke
It’s time for Senecas and New York to resolve tax issue once and for all
No matter how many bills the New York State Legislature passes, and how many of them Gov. David A. Paterson signs, the state won’t collect a dime of taxes on cigarettes sold on the state’s Native American reservations until various matters are hashed out, once and for all, in court.
So, by all means, let’s get to litigating.
Paterson must have had this in mind Monday when he signed the latest legislative attempt to apply the state’s $2.75- a-pack excise tax to the cigarettes sold to non-Indians by the Seneca Nation and the other tribes that claim treaty rights to be exempt from state taxation.
A long-standing conflict of court rulings makes it extremely unlikely that the law Paterson signed will have any direct impact on Indian cigarette sales. But it may strengthen his hand in the ongoing talks with the Senecas over how to resolve the issue.
Or it might be more accurate to say that signing the bill won’t boost Paterson’s position so much as vetoing it would have weakened it. Signing the bill was Paterson’s way of saying he will not abandon the 1994 U. S. Supreme Court ruling holding that the state has the right to collect the tax.
Of course, neither will the Senecas give up the 2005 New York court ruling, which held that cigarettes sold by Indians, to Indians, are indeed exempt from state tax, as per both state law and treaties between the Seneca Nation and the United States of America.
But even if everyone agrees that cigarettes, or anything else, sold by Native American nations to their own members are exempt from anyone else’s taxes, that doesn’t stop the state from properly collecting the tax on any product, sold by anyone, who is not a member of such a tribe and thus not qualified for the treaty benefits of a tax-free product.
Even the 2005 ruling that blocked an earlier attempt to collect the tax was based on the fact that the state hadn’t bothered to provide real Indians with some form of coupon or ID that would prove their right to be exempt from the tax. Provide such a workable system, and the Senecas’ claim to total independence to other people is suspect at best.
Of course, the right to smoke isn’t what the nation is fighting for. It’s the right to sell — or, more exactly, to undersell — cigarettes at a price that gives them a huge advantage over retailers that must collect the whole tax load on every pack. Such a situation deprives the state of needed revenue, hurts rival retailers and does far too much to entice people to start, or to continue, a deadly habit that adds to the cost of government even as the prized tax exemption takes away from its revenue.
If it were anything but cigarettes, then the Senecas’ claim to be engaged in nothing more than self-supporting commerce might have an ethical leg to stand on. But the nation’s trafficking in such a harmful product saps most of the sympathy from that claim.
Clearly, the cigarette tax bill that is now an ineffective law is less a tax collection measure than a bargaining chip. A concept that the Senecas, owners of large casinos, know well.
We’ll see everybody in court.
Log into MyBuffalo to post a comment
MyBuffalo is the new social network from Buffalo.com. Your MyBuffalo account lets you comment on and rate stories at buffalonews.com. You can also head over to mybuffalo.com to share your blog posts, stories, photos, and videos with the community. Join now or learn more.
Reader comments
Learn more about our moderation system.