A statewide trade group of convenience stores wants Gov. David A. Paterson to suspend a sharp increase in the sales tax on cigarettes, as the state and Native American retailers tussle over tax collections.

The New York Association of Convenience Stores contends that Paterson made a "double-edged bargain" with the State Legislature this year: raising excise taxes on cigarettes to $4.35 per pack, from $2.75 per pack, starting July 1, while mitigating the impact by starting to capture taxes on Native American sales of cigarettes to non-Native Americans on Wednesday.

But the collection of state taxes on cigarette sales to non-Native Americans has been put off, at least for now, following court rulings.

"If one side of this bargain has been placed on hold, it's only fair that the other should be put on hold, as well," James S. Calvin, president of the convenience store group, said in a letter to Paterson this week.

The trade group urged Paterson to issue an executive order that would temporarily return the cigarette tax to $2.75 per pack. Morgan W. Hook, a spokesman for the governor, said in response that Paterson "cannot suspend the law."

"Mom-and-pop stores" have lost 25 to 45 percent of their cigarette unit sales since the 58 percent increase in the tax took effect, according to the trade group.

"They shouldn't have to continue to endure this economic hardship while courts allow their Native American competitors to keep thumbing their noses at New York State's law," Calvin wrote.

Native American retailers have also raised the issue of economic hardship, contending that they would suffer lost jobs and revenues if taxes were collected on cigarette sales to non-Native Americans. They also contend that such collections would violate centuries-old treaties.

Michael F. Newman, executive vice president of Noco Energy, which oversees a chain of convenience stores, disputes that treaties forbid taxes on tribal sales of cigarettes to non-Native Americans.

Newman said he is not a proponent of increasing taxes but instead wants to create a "level playing field" for competition.

"I'm a U.S. citizen," Newman said. "I pay income taxes, I pay property taxes. I support the government. I ask the question, 'Who's there to protect me?'"

Newman, who is also chairman of the state convenience store group, contends that the sharp drop-off in cigarette unit sales by mom-and-pop stores is caused by consumers buying from Native American retailers because of the sharp tax increase, not from reducing their spending on tobacco products.

"People have made the decision they can't afford the higher price," he said.

Newman said he would like to see the tax increase on cigarettes suspended "until the government is able to resolve this [Native American taxation] issue once and for all."

mglynn@buffnews.com null