Senate Moves on Indians

As the NY Times reported on Saturday, the State Senate passed legislation that would require cigarette tax stampers to make sure that all of their cigarette sales would be taxed when sold to the public: "The other notable legislation passed Friday would bar tobacco manufacturers from selling cigarettes without assurances that they will be taxed when they are sold to consumers. The legislation requires stamping agents — middlemen between manufacturers and retailers — to provide certifications that the cigarettes will be taxed when they are sold. The measure was previously passed by the Assembly, but it is not clear whether the governor will sign it. Such a tax could bring in hundreds of millions of dollars, but governors have held off collecting the taxes in the past because such moves have led to violent protests."

The passage of the legislation was praised by Mayor Bloomberg, a recent convert to the cause of proper enforcement: "“For too long, the New York State tax on tobacco products has applied to some but not all, with businesses on Indian reservations openly flouting a Supreme Court ruling and existing state law,” the mayor said in a statement. “The State Senate today joined the Assembly in shining a light on unmistakably unfair tax practices that cost taxpayers hundreds of millions of dollars and keep tens of thousands of people smoking when they might otherwise quit.”

What will happen here is unclear since the governor has not indicated what his intentions on this will be: "Such a tax could bring in hundreds of millions of dollars, but governors have held off collecting the taxes in the past because such moves have led to violent protests. “We will review the bill and seek input from interested parties when it is sent to the governor,” said Risa B. Heller, the governor’s communications director."

Typically, the Seneca Nation is not on board with this latest attempt to prevent the continuing hosing of New York's tax payers: "When Governor Spitzer pondered collecting the taxes last year, Maurice A. John, the president of the Seneca Nation, told The Buffalo News, "we are not going to be tax collectors for New York State." We'll see about that.

In a related piece of news, a district court refused to throw out the Catsimatidis (Gristedes) lawsuit against the Long Island Unkechauge tribe for their flouting of the state's tax laws. This should now open the door to bringing in at least 20 more smoke shops and smoke shop owners into the case whose outcome could positively impact the political debate.

In its pleading against the charge that the tribe was falsely advertising its cigarettes as "tax free," the Unkechauge attorneys had this revealing, ultimately unsuccessful, defense: "Finally, defendants argue that Gristede’s Lanham Act claim must be dismissed because the alleged advertisements are not false in view of New York State’s policy of forbearance on the collection of taxes on cigarette sales made to Native American retailers for re-sale to the public..."

So we see clearly just how damaging the state's "forbearance" on enforcing duly passed laws has come to be: the law breakers are trying to use this nonfeasance by our elected officials in defense of their flouting of the statutes. We need this to be remedied right away-and the governor needs to both sign the legislation, and move swiftly to enforce it.