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Bid to collect taxes from Senecas halted
Buffalo News ^ | 2/11/2004 | Tom Precious

Posted on 02/11/2004 5:41:00 PM PST by lockjaw02

Bid to collect taxes from Senecas halted By TOM PRECIOUS News Albany Bureau 2/11/2004

(picture caption) Assembly Speaker Sheldon Silver is willing to allow the governor time to work out deals with Native American tribes.

ALBANY - The state Tax Department is suspending indefinitely the government's efforts to collect taxes on sales of cigarettes and gasoline on Indian reservations to non-Indian consumers.

Gov. George E. Pataki last month said he would ask the Legislature for permission to delay the tax collection for a year while he negotiates side deals with Indian tribes.

But State Tax Commissioner Andrew Eristoff said Tuesday that his agency does not intend to collect the tax. Collections were supposed to start next month.

The Legislature last year ordered the agency to devise regulations to stop the flow of what lawmakers say are costly and illegal tax avoidance schemes by Indian tribes taking advantage of New York's high cigarette taxes.

Non-Indian retailers condemned the move by the tax chief, while officials with the Senecas, considered among the nation's top Indian cigarette sellers, said the tribe's multimillion-dollar ad campaign against the tax may have persuaded Albany to back down.

But in a rare display of division within the Pataki administration, the governor's economic development director said the state needs to provide a level playing field for small businesses to compete with Indian retailers.

Eristoff recalled the violence along the Thruway in 1997, the last time the state tried to enforce the tax rules. He acknowledged that the threat of violence by some Indians contributed to his decision to stop the collection efforts.

Trying to work something out makes most sense for the state, Eristoff told reporters after he testified before Senate and Assembly committees on the governor's 2004 state budget plan.

"I think it would give anyone pause before taking action," Eristoff said of the violence in 1997.

"We feel this has been an extremely complicated process. We have endeavored to strike a reasonable balance between the Legislature's intent and the need to respect Indian sovereignty," he said.

Assembly Speaker Sheldon Silver, D-Manhattan, has said he is willing to give Pataki time to negotiate deals with Indians.

A spokesman for Senate Majority Leader Joseph L. Bruno, R-Brunswick, said Tuesday the issue will be discussed in state budget talks.

Charles Gargano, the state's economic development chief, said, "I can't speak for the Department of Taxation, but I do believe there should be level competition at all times to protect our small businesses."

He added that the state needs to look out for small businesses and that he would not support any unfair competition.

Tax officials said Tuesday that New York tribes account for more than 50 percent of Internet cigarette sales in the nation. One official estimated that some Seneca retailers export 85 percent of their cigarettes out of state.

The agency estimates 28 million cartons of cigarettes were sold by wholesalers to Indian nations in New York, with much of that going to Seneca retailers.

Non-Indian retailers and legislators say the state is losing at least $400 million in excise taxes - $15 on a carton of cigarettes - by not collecting on Indian sales of cartons. But tax officials say the number is closer to $40 million because much of the Indian cigarettes are sold beyond the state's borders.

Critics dispute that, and say the agency is not taking into account lost sales of cigarettes Indians purchase from sources outside those monitored by state tax officials.

Non-Indian retail groups said the tax department's decision Tuesday is illegal.

The leader of the New York Association of Convenience Stores noted that Pataki last month asked the Legislature to approve a one-year delay in the law's implementation and the state tax commissioner is now pushing off the enforcement.

"It sends a message that the state of New York does not care about equality in enforcing its tax law, and it sends a message to every citizen of New York that if you don't like a certain tax policy, you threaten some sort of violence and then you can get a pass," said James Calvin, executive director of the New York Association of Convenience Stores. Dan Finkle, a spokesman for Fair Application of Cigarette Taxes, a consortium of non-Indian businesses and health groups, said: "This isn't cooperation or confrontation. It's capitulation."

Last month, Pataki said the regulations should be put on hold while he tries to negotiate separate deals with Indian tribes. He suggested the Indians might raise the price of their products to create price parity with non-Indian retailers.

But Seneca leaders insisted they would never negotiate such deals and said their tax-free sales are protected by an 1842 treaty between the tribe and the federal government. The tribe last week asked President Bush to intervene in the dispute.

"For the Seneca Nation, it's one of the end results we were looking for," Arthur Montour, a Seneca tribal council leader, said of the tax commissioner's announcement Tuesday.

Eristoff said the tax agency also has signed a memorandum of understanding with the New York State Police to work more closely together on cigarette bootlegging crimes.

"It's really designed to ensure we don't trip over each other," he said.


TOPICS: Business/Economy; Government; News/Current Events; US: New York
KEYWORDS: pufflist; taxes; tobacco
Well, well, well... Congrats to State Tax Commissioner Andrew Eristoff for showing a little bit of common sense, even though it was apparently for the wrong reason.
1 posted on 02/11/2004 5:41:03 PM PST by lockjaw02
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To: *puff_list; Chad Fairbanks; bc2; The Mayor; qam1; VermiciousKnid; Madame Dufarge; SheLion; Gabz; ...
(ping)
2 posted on 02/11/2004 5:42:47 PM PST by lockjaw02 ("Man's capacity for self-deception is unlimited." --George H Tausch)
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To: lockjaw02
I think they realise thet a whole bunch of us non Indians were going to join them burning tires on the thruway!
3 posted on 02/11/2004 5:47:37 PM PST by The Mayor (Be steadfast, immovable, . . . knowing that your labor is not in vain in the Lord.)
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To: lockjaw02
Eristoff recalled the violence along the Thruway in 1997, the last time the state tried to enforce the tax rules. He acknowledged that the threat of violence by some Indians contributed to his decision to stop the collection efforts.

If I threaten violence can I get off paying taxes? Great idea, I used to think they would send Swat teams with machine guns and flak jackets to bust down my door.

4 posted on 02/11/2004 6:09:03 PM PST by rmmcdaniell
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To: lockjaw02
Just more of the "reservation as sovereign nation" racket. They are sovereign (claim to be anyways) when it suits them.
5 posted on 02/11/2004 6:11:19 PM PST by dennisw ("Cuz we'll put a boot in your ass it's the American way" - Toby Keith)
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To: lockjaw02
Duh - lower the flippin cigarette taxes and they won't have to worry about it.

Level playing field - my rear end.
6 posted on 02/11/2004 6:25:59 PM PST by Gabz (Smoke gnatzies: small minds buzzing in your business - SWAT'EM)
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To: Gabz
If I have to pay DOUBLE because of taxes for any product,which is what I have to pay for cigarettes bought from a local retailer in my area,you bet your sweet bippy I'm going to give my business to the Indians.

Do any of these morons in state government think about this backlash at all?

If they prevent the Senecas from selling they will just open up the field for the 21st century Al Capones.

Lower the taxes,problem solved.


7 posted on 02/11/2004 6:55:42 PM PST by Mears
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To: Mears
I agree completely with you.

They can't lower the taxes....they are in a dmaned if they do and damned if they don't situation. They need the money from the increase, but they are not getting what they claimed they would if they raised them because smart smokers are finding other ways of buying their cigs.

also - they would have to admit that increased cig taxes do not cause people to quit like they claim - they just buy elsewhere. They would never admit to that.
8 posted on 02/11/2004 7:25:52 PM PST by Gabz (Smoke gnatzies: small minds buzzing in your business - SWAT'EM)
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To: lockjaw02
As long as New York State ain't getting the money, it's A-OK with me.

Regards,
9 posted on 02/11/2004 7:56:49 PM PST by VermiciousKnid
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To: The Mayor
YUP!
10 posted on 02/11/2004 7:57:24 PM PST by cyborg
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To: Mears
My town

http://www.marionstar.com/news/stories/20040211/localnews/396311.html
11 posted on 02/11/2004 8:51:49 PM PST by dar29oh (Of course I don't smoke.. that would be wrong.)
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To: dar29oh
Thanks for the link! Looks like the folks in Ohio,the great American heartland,have more guts than the libs here in Massachusetts.
12 posted on 02/12/2004 11:51:39 AM PST by Mears
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To: rmlew; Clemenza; firebrand; NYC GOP Chick
ping
13 posted on 02/13/2004 1:22:38 PM PST by Cacique
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To: Cacique
Yippee! Cowboys and Indians! On the Thruway! Andrew must be really scared to be throwing the chance of additional revenue away.
14 posted on 02/13/2004 1:58:48 PM PST by firebrand
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