Posted on 09/21/2003 4:44:20 AM PDT by Behind Liberal Lines
SYRACUSE NY--Native American nations across New York are gearing up to protest the state's latest effort to collect millions of dollars in taxes on cigarettes and gasoline sold to non-natives on Indian territories.
The Onondaga Nation will never collect a tax on cigarettes for New York, nation lawyer Joe Heath said, but it is willing to negotiate to resolve some of the state's concerns about the regulation of Native American businesses.
If the state tries to force the Onondaga Nation to collect taxes on the cigarettes the nation sells, Onondaga Chief Virgil Thomas said, the Onondagas will build a toll booth on Interstate 81 and charge a fee for those who cross their territory.
"If we can build this," he said, pointing to the nation's state-of-the-art lacrosse and hockey arena on Route 11, "we can build a toll booth."
The state Tax Department issued new proposed regulations concerning the collection of taxes on Indian nations Sept. 12. But leaders of the six Indian nations that make up the Iroquois Confederacy, or Haudenosaunee, maintain that the Iroquois treaties with New York bar the state from imposing taxes on Indian land.
In the past week, leaders of the Oneida Indian Nation, Cayuga Indian Nation, Seneca Nation of Indians, Tuscarora Nation, Tonawanda Band of Senecas, and St. Regis Mohawks have vowed to resist any effort by the state to collect taxes on sales on their lands.
"This is not going to get resolved," said John Kane, a Mohawk manager at Ross John Enterprises, which owns a Holiday Inn and four cigarette and gasoline shops on the Seneca Nation's territories in western New York. "The state is going to back down again."
Such vows raise images of 1997 - the last time the state attempted to force the collection of taxes in Indian nations. That attempt spurred demonstrations, roadblocks and other incidents at Indian territories across the state. The state abandoned the effort.
The new state regulations would require businesses on Indian territories to purchase cigarettes and motor fuel from wholesalers. The state would charge the wholesalers the $15-per-carton excise tax on cigarettes. The wholesalers would pass the state excise taxes on to the Indian businesses.
The Indian vendors would be expected to pass the cost on to non-Indian customers. Native American consumers would receive state-issued coupons so they could buy cigarettes from businesses on Indian lands and avoid paying the $15 per carton excise tax.
The state said it would also require non-Indians who buy cigarettes and other items from Indians on reservations to pay the state and local sales taxes, which range up to 7.25 percent. Consumers would not pay the sales tax at the register, but through a new line on their state income tax returns.
The state could prosecute anyone who fails to pay the sales tax on their income tax return.
Native American businesses are also expected under the proposal to pass on to non-native customers the 36.8 cents per gallon state taxes on gasoline, based on a $1.85 per gallon price.
The tax department estimated that the new regulations would help the state collect an extra $20 million in the state fiscal year that ends March 31 and $64.5 million in the following year.
New York lost about $500 million in 2001 and as much as $895 million in 2002 by failing to collect taxes on tobacco products sold by Native American businesses, over the Internet, and by bootleggers, according to a study paid for in 2002 by the FACT Alliance for the Fair Application of Cigarette Taxes.
Doug George-Kanentiio, a Mohawk writer who supports the traditional Iroquois chiefs, said traditional Iroquois are worried that the state will try to link the gas and cigarette taxes to negotiations over Indian casinos and land claims.
"The state will say at some point of the negotiations that they will withhold the expansion of casino gambling until the Indian nations comply with the tax regulations. That's what's going to happen," he said.
Meanwhile, non-Indian convenience store owners are unhappy that the state has allowed Indian businesses to have an unfair competitive advantage because of the tax issue.
Because of the price differences, there's been a huge shift of customers away from the tax-paying convenience stores to unlicensed, unregulated tax-free Native American stores selling cigarettes and gas, said James Calvin, president of the New York Association of Convenience Stores, which represents 1,800 stores.
Taxes vs. sovereignty
On this issue, economics butts up against sovereignty claims.
The U.S. Supreme Court in 1994 ruled that New York could collect taxes on cigarette and gas sold to non-Native Americans by businesses on Indian territories.
In 1996, Pataki announced plans to force businesses on Indian territories to collect and remit to the state taxes on gas and cigarettes sales to non-natives.
In 1997, traditional chiefs of the Onondaga, Tuscarora, Mohawk and Seneca nations negotiated with Pataki an alternative deal that would allow businesses on Indian territories to avoid collecting state taxes if the businesses were licensed by tribal governments, paid a fee to the tribal governments, and agreed to a minimum price system for the gas and cigarettes they sold.
The minimum prices and fee were designed to keep prices for cigarettes and gas at the Native stores on par with prices at other stores in New York. The Indian nations were to use the licensing fees to fund social programs on their territories.
But the deal was denounced by independent Native American business owners and their supporters, who claimed it violated Indian sovereignty.
While refusing to pay taxes to New York, independent native business owners were also opposed to paying licensing fees to their own tribal governments.
"We have free enterprise here in the Seneca Nation," Kane said.
In 1997, supporters of the Native American business owners briefly blocked traffic on Interstate 81 on the Onondaga territory, shut down a 40-mile stretch of highway on the Senecas' Allegany reservation, and closed the state Thruway for about 45 minutes on the Senecas' Cattaraugus reservation.
After Pataki abruptly abandoned the commerce agreement, suspicious fires damaged houses owned by traditional Onondaga Chief Ollie Gibson and Tuscarora Chief Leo Henry.
The new initiative
Despite ongoing complaints from off-reservation convenience store owners, the state opted not to push for a resolution of the sales tax issue with the Native American businesses until this year.
In May, Pataki announced a tentative land claim settlement with the St. Regis Tribal Council - the elected Mohawk government at Akewesasne in northern New York - that also would allow the Mohawks to open a casino in the Catskills and to be free of state taxes on Mohawk sales of cigarettes and gas to non-natives.
The newly elected Mohawk tribal council has since rejected that agreement with Pataki.
In passing its own state budget in May, the legislature mandated that the Pataki administration begin taxing the sales of cigarettes and gas to non-native customers by businesses located on Indian territories, claiming that the state could collect $165 million in revenue.
Pataki criticized the legislature, saying that such action would have "devastating consequences for the state's relationship with Native Americans" and insisted the issue should be resolved through government-to-government negotiations with the Indian nations.
Last week, Pataki's state tax department issued its new proposed tax regulations, which are scheduled to become effective Dec. 1 unless the tribal governments reach alternative agreements with the state.
"These regulations were mandated by the legislature over the governor's veto. The tax department must follow the law," said Tom Bergin, a spokesman for the tax department.
Heath, who represents the Onondaga Nation, the Tonawanda Band of Senecas and the Tuscarora Nation, met Wednesday in Albany with two members of Pataki's staff to learn about the proposed regulations and to open the door for negotiations on an alternative commerce agreement.
The 1997 deal that Pataki and the traditional chiefs negotiated could be used as a starting point for a new round of negotiations, Heath said.
Reviving the 1997 commerce agreement - which would mean the traditional chiefs would regulate businesses on Indian territories - is one way to avoid the state imposing taxes on Dec. 1, said George-Kanentiio.
Heath said no one knows if the tax department's initiative will prompt the kinds of demonstrations and violence that occurred in 1997.
"Will the fires start up again? Who knows," Heath said. "I don't want to predict there will be no protests."
The atmosphere is different than it was in 1997 at Onondaga because the people of the Onondaga Nation forced the privately owned cigarette and gas businesses to shut down and the nation now runs the only cigarette business on the territory.
The business climate is different at the Mohawk, Seneca, and Tuscarora nations.
There, businesses that are not licensed by the Native American governments and contribute no revenue to the governments sell tax-free gas and cigarettes.
Native Americans will block the highways if the state tries to tax the reservation businesses, predicted Kane, a Mohawk who in 1990 was convicted of conspiring to torch the Oneida Nation's bingo hall.
"You can't shut down people's livelihood and not expect a fairly tumultuous response," Kane said.
I'm well aware of Iroquois history being from Ohio. I guess it's not too much of a surprise about the mixed composition of the Iroquois. In the 17th century, we know of their dealings with both the French and then the British.
I bet the French wished that they were the ones who supplied them with munitions.
Let's face it: the "original intent" of the treaties was to stick them onto what basically amounted to ghettos and hope they went away.
Is that what you want? Of course not.
One would think you want the Indians to be treated equally and fairly.
Equally and fairly means that they have the same rights--and responsibilities--as anyone else who claims United States citizenship.
And I'll raise you both the NYS & NYC cigarette tax, that you then have to pay both NYS & NYC sales tax on.
When it comes to such double taxation, even Delaware is practically benign (no sales tax) - but I'm still glad I moved to Virginia.
Actually a group of Patriots dressed as, and therefore disguised as, Indians threw tea into the harbor. Somehow there is a delicious irony in this...
It's reassuring that some Americans still have the fortitude to stand up for their Rights and resist tyranny.
I'd like to see them set up a "progressive" toll system which doesn't assess tolls on private vehicles, but assesses a $50 toll on all vehicles operated by the state.
They'd lept from the stone age to the iron-age in a decade! This is one of the reasons the Iriquois were highly respected by everyone in the early days.
The French, in their guise as Huguenot Traders, did, in fact, provide the Iriquois with just about anything they needed anyway. These same Huguenot Traders are sometimes misidentified as Dutch Traders or English Traders.
Duh! The Irish, of course, "own" Boston at present unless something happened during the hurricane that I hadn't heard about.
Now, how long do the children pay for prior foolishness? Check with your lawyer. Ask him how far back he runs his title searches when you buy or sell land. My lawyer takes it to 1756. When I lived in Indiana they only ran them to 1804. Since it's all "one country", I think Virginia should quit at 1804, don't you?
Now, knowing that, how are the Oneida to know who among their customers are or are not "Indian" and therefore not subject to the taxes in question?
I think this would not be such a problem if the non-Oneida would just move off the land and give it all back like the USSC said.
What kind of law is it that you illegal aliens brought from your hovels in Europe that you believe makes your stealing immune from censure?
What kind of law is it that you illegal aliens brought from your hovels in Europe that you believe makes your stealing immune from censure?
In the first place, you're no more an Oneida than I'm a German, a Scot, an Irishman or an Englishman.
Secondly, I never stole anything from you.
Interesting subject. Before I comment, can you pass along the case information you are referring to? Thanks...
There should be no doubt in this case. The state of New York expelled the Oneida Indians from their ancient lands because they were "too white" and had become assimilated.
Think that one through ~ particularly if you live in New York. The precedent in the statutes and in the courts up there is that you can be "too white" to have property rights!
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