Not Suitable

Another attempt to shut down the Indian sale of non taxable smokes was shot down by (via Azi) an upstate judge who claimed that the plaintiff lacked standing. The big losers? New York's tax payers: "A State Supreme Court justice has dismissed a state lawmaker’s lawsuit seeking to force the collection of taxes on cigarettes sold by Indian retailers. The legal victory for the retailers, as well as the administration of Gov. David A. Paterson, means the state Department of Taxation and Finance can continue not to enforce the 2005 law, overwhelmingly passed the State Legislature, that required the state to begin collecting the excise taxes on tobacco sales to non-Indians. Lawmakers say the state loses at least $400 million a year by failing to collect the taxes."

All hope is not lost, however. Governor Paterson, faced with a huge fiscal shortfall, actually has a chunk of this tax revenue penciled in for collection: "Paterson’s victory, however, could be mixed. Like Eliot L. Spitzer and George E. Pataki, the state’s two previous governors, Paterson has indicated he wants to collect the taxes but has backed away from any attempt to go after the revenue. Still, the governor has agreed to a budget for the current fiscal year that assumes the state will receive $120 million from such taxes. Just how remains uncertain." (emphasis added)

There's the rub, of course. With the state hemorrhaging money, Paterson's under a great deal of pressure to act in this egregious case of governmental nonfeasance: "The 2005 law, which took effect March 1, 2006, requires collecting the taxes at the wholesale level. It directed the Tax Department to print coupons and distribute them to Indians, who are legally exempted from taxes on cigarettes. But the department never sent out the coupons, thereby rendering the law unenforceable."

Everyone's intimidated here by terrorist threats-the Indians had violently protested the enforcement of the law in the nineties-actually shutting down the Thruway by burning tires. Jim Calvin of NYACS properly blasted the judge's pusillanimous ruling: "The New York State Association of Convenience Stores, which helped finance the legal challenge, blasted the ruling.
“The judicial branch just granted the executive branch the power to disregard an act of the legislative branch after it’s signed into law,” said James Calvin, the group’s president. “This has alarming constitutional implications far beyond this particular case. The message is that if the Legislature passes a law, and the governor signs it but just doesn’t feel like implementing it, no one has legal recourse — not even a legislator who voted to enact the statute on behalf of his or her constituents.”

What's needed here is a state wide coalition of folks-from tax payers to small business owners-to force the governor to grow a spine on this issue. Draconian measures are in the offing to cur costs, while a ready made revenue remedy is left off the table. It makes no sense.