Published: December 15, 2008 11:33 pm      

TAXES: Smokers fired up over Paterson move

Smokers were fired up Monday after learning about Gov. David Paterson’s decision to sign a bill that would allow the cash-strapped state to collect taxes on cigarettes sold to non-Indians by Native American retailers.

Several visitors to area Native American smoke shops said the move felt to them like another money grab on the part of an already greedy New York state.

“I think that the taxes are already crazy,” said Town of Tonawanda resident Chris Rathman during a stop at Smokin’ Joe’s gas station on Saunders Settlement Road in Lewiston. “You take the ride out here to save some money and now they are trying to raise the taxes? I think it’s unfair.”

The new law, which is expected to face fierce opposition from Native American retailers, will prevent manufacturers from selling tobacco products without a state tax stamp to any wholesaler that doesn’t certify the cigarettes will not be resold tax free by New York tribes. Violators could be prosecuted under criminal perjury laws.

Paterson signed the controversial bill during a stop in Utica on Monday where he said the state Tax Department will now be asked to establish a certification process for wholesalers within the next 60 days. The move comes at a time when Paterson and state lawmakers are attempting to increase state revenue in the face of a $15 billion state budget deficit. Supporters of the plan say it would allow the state to recover more than $62 million in cigarette taxes per year.

The state’s excise tax is $2.75 per pack.

“I disagree with it totally,” said Buffalo resident Mary LaPorte, a smoker and frequent visitor to Smokin’ Joe’s. “Cigarettes are expensive enough without paying more on top of it.”

Several local Native American retailers declined comment when asked for their opinion on the situation.

A manager at Jay’s Place on Walmore Road on the Tuscarora Reservation in Lewiston agreed to speak only if her name was not used. The manager said Native American retailers have been disappointed by the media’s handling of the issue in the past, noting that in many cases it has been portrayed as a dollars and cents issue when the main concern for most Native Americans is the trampling of their sovereign rights.

“Treaties are the supreme law of the land and the Constitution of the United States says Native Americans will not be taxed,” she said.

The store manager added that cigarette sales have led to greater prosperity for the Tuscarora Nation and have provided jobs on the reservation for Native Americans and non-Indians alike. Jay’s Place, she said, employs more than 30 people.

“It has increased the standard of living on the reservation,” she said.

Off-reservation convenience store owners welcomed the governor’s decision. Jim Calvin, president of the New York Association of Convenience Stores, called it a “symbolic step forward” in his group’s “quest for tax fairness.” The big question, he said, remains if the state will actually follow through this time and enforce the law.

“We remain hopeful, but there have been many times in the past when our hopes have been dashed,” Calvin said.

Officials have long argued the state constitution and treaties authorize taxing Indian sales to non-Indians and previous governors have announced plans to collect hundreds of millions of dollars in sales and other taxes only to have negotiations with tribal leaders languish.

In 1997, the last time the state tried to collect the tobacco taxes, protesters from the Seneca Nation of Indians used burning tires to shut down a section of the New York State Thruway, which runs through tribal territory in Western New York.

On Monday, Seneca Nation President Barry Snyder Sr. characterized Paterson’s decision as a “threat” that would force the nation to re-examine “every aspect” of its relationship with New York state. Snyder said the issue is not about cigarettes, but rather protection of the nation’s treaty rights and added that the nation is in the process of developing an action plan for dealing with the new development.

“We will do what it takes at the right time to protect those rights," Snyder said in a written statement.

Paterson said Monday he attempted to reach a settlement with the leaders of New York’s Native American nations in the weeks leading up to the signing, but was not successful. He added that the move was not intended to antagonize Native American leaders, but rather to provide them with adequate notice of the state’s intention to begin enforcing laws already on the books regarding the collection of taxes on tobacco products, including those purchased on reservations and over the Internet.

“We are not trying to create the notion of a threat,” Paterson said. “We are holding fast to the notion that we have the right to collect taxes from our citizens buying cigarettes.”



The Associated Press contributed to this story. Contact reporter Mark Scheer at 282-2311, ext. 2250