PURSUE BUYERS, NOT RETAILERS, SENECAS SAY
The Buffalo News
LINK Tom Precious, Albany Bureau
July 19, 2003
ALBANY - The head of the Seneca Nation of Indians says the state should go after non-Indian smokers, not Indian retailers, in its bid to collect sales taxes on Internet and mail-order sales of cigarettes.
"The consumers are the ones who owe the tax, so they are the ones (the state) should go after," Seneca President Rickey L. Armstrong Sr. said in a statement. "They shouldn't expect a sovereign nation to collect taxes on the state's behalf."
Armstrong released a statement in response to a Buffalo News article Friday that reported state tax officials are poised to begin trying to collect sales and excise taxes, as well as penalties, from non-Indian smokers who buy cigarettes from Indian retailers via the Internet or the mail.
Tax officials said there is concern about threats of violence from Seneca members who have vowed to block any attempt by the state to collect the tax from Indian retailers or try to block the tobacco sales.
Armstrong sought to distance the tribal leaders from individual Senecas who have made public threats to use the same sort of violent protests that resulted in widespread arrests and injuries to Senecas and state troopers in 1997, when the state last briefly tried to collect sales taxes on sales of cigarettes by Indians. "The nation executives and Tribal Council do not condone violence," Armstrong said. "We would not support a violent protest as a response to this tax disagreement. However, we cannot control what each individual Seneca member says and does."
Peter Farrell, state Tax Department deputy commissioner who is in charge of tax enforcement, told a state task force on tobacco issues Thursday that the agency has gotten cooperation from 40 shippers to no longer deliver cigarettes without tax stamps coming from Indian reservations.
With concerns about possible Indian violence, he said the agency is looking to begin targeting consumers who buy from the Indians in order to collect the tax; he estimated the state is losing $400 million a year in tax evasion from Indian Internet and mail-order tobacco sales.
In 2000, the Legislature, trying to address lost tax revenues and illegal sales of cigarettes to minors, passed a law banning sales of cigarettes through the Internet. The tobacco industry sued, which blocked the law's enactment until a federal appeals court earlier this year said the state law does not violate interstate commerce protections.
A subsequent lawsuit has since been filed by Seneca and non-Indian Internet retailers; no injunction has been issued in that case, leaving the the state free to start enforcing the law.
Farrell did not say precisely how smokers' names would be collected, though he mentioned that his agency was working with federal officials on the matter. Seneca officials could not be reached to say whether Indian retailers would cooperate with state tax officials in providing names of their clients.
Non-Indian retailers have long accused the administration of Gov. George E. Pataki of being too fearful of Indian violence when it comes to collecting the tobacco taxes that a U.S. Supreme Court ruling said the state has a right to collect.
They will probably get the names from the credit card companies.
If they stop purchases from the Native Americans smokers will all be out looking for the local bootlegger.