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FreeRepublic , LLC PO BOX 9771 FRESNO, CA 93794
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Posted on 01/15/2003 3:36:26 PM PST by Marianne
ALBANY - Tax avoidance by smokers has become so widespread that upward of 40 percent of all cigarettes consumed in the state are obtained through Indian smoke shops, the Internet and other places that don't charge state or local taxes, an industry group said Tuesday.
The rush by smokers to Indian retailers, out-of-state stores and Internet sites intent on bypassing the state's rising cigarette tax cost the government nearly $900 million in tax receipts last year, according to an industry-funded study by Fair Application of Cigarette Taxes, a group representing convenience shops, grocery stores, gas stations and others that sell cigarettes.
The long-simmering debate has intensified again as the industry groups seek to use the lost tax revenue numbers as leverage with government officials desperate to find cash to close a deficit estimated as high as $12 billion.
Native American representatives dismissed the study as a self-serving effort from an industry trying to take advantage of the state's budget deficit problems.
In a strange twist, Fair Application of Cigarette Taxes appeared Tuesday in Albany, allied with health care lobbyists with whom they had fiercely fought in past tax-increase battles. Both urged the state to restrict the sale of untaxed cigarettes.
"On this issue we have common ground," said Russell Sciandra, director of the Center for a Tobacco Free New York.
The health groups say tobacco consumption levels have fallen since the state last year pushed its cigarette taxes to the nation's second-highest - $1.50 per pack. However, they say the drop has not been nearly as much as it would have, had such easy ways to avoid taxes not been available to consumers.
"We want to see the full public impact of the increase in excise taxes," said Timothy Nichols, a lobbyist with the American Lung Association.
In the Buffalo area, non-Indian retailers say they have seen their revenues drop since last year's big cigarette tax increase as more and more of their customers head to Seneca smoke shops or the Internet.
The U.S. Supreme Court has said the state has a right to collect taxes on cigarette sales by Indians to non-Indians. But the Pataki administration, after once siding with non-Indian retailers and in the face of violent Indian protests, in 1997 backed off trying to collect the taxes from reservation sales.
Now, with the state facing a huge budget shortfall, industry officials believe they may have a new tactic to use in Albany to get officials to notice their plea.
The state "has a right to collect this tax to help solve the state's budget problem," said Dan Finkle, a Fulton County businessman and spokesman for Fair Application of Cigarette Taxes. His group is scheduled to hold a news conference today in Buffalo on the issue.
The group spent $17,000 on a study to look at uncollected taxes from cigarette sales. The group's consultant, using a variety of data, estimated up to $609 million in cigarette taxes went uncollected in 2001. By last year, that number had soared to nearly $895 million. Besides the state, local governments were money-losers since the nontaxed sales lowered what they would have otherwise collected in sales taxes.
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FreeRepublic , LLC PO BOX 9771 FRESNO, CA 93794
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Also, ever try any of the Indian sites here in the U.S.?
Where I'm living, it's cheaper to pay the state tax (one of the lowest in the U.S.) than to buy Indian. A carton for $22.50.
I say dust off the jack-booted thugs and force everyone who smokes be able to prove they have paid their taxes. Use swat-teams at road blocks to search anyone suspected of using tobacco to prove that have used legally obtained and taxed cigarettes. The Constitution provides no right to smoke, bust them till they bleed.
Once again the Dimocraps display their overwhelming concern for the oppressed poor.
By oppressing them and picking their pockets.
Search Google or Alta Vista for stuff like "Indian tobacco smoke shop online" and you'll get plenty of hits.
For the truly budget conscious, you can try the roll-your-own sites (ryotobacco.com, stuffyourown.com).
*I have no stake in any of those sites.*
Exactly, if they would lower the tax to a reasonable level they would collect more revenues. As it is now I feel no shame in purchasing from the reservation to avoid absurd taxation.
If you ever want to see the principal of the "tyranny of the majority" or true democracy in action look no further than Washington State and ballet initiatives. A can of Copenhagen now cost $8.50 at the local stop and rob. On the res it's $3.00 a can. With a disparity like that people are willing to make a drive and stock up.
I am willing to pay $1.00 a can for taxes but not $5.50. As it stands now the state gets nothing from me and growing number of others have figured it out to. I would rather support the Indians than the democrats in Seattle anyway.
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