A growing coalition of diverse forces is gathering on the need for the governor to enforce the tax laws against Indian cigarette dealers-and a new group, Enforce the Law—Collect the Tax is -trying to bring everyone together.
As the groups points out in its mission statement: "New York today faces a catastrophic budget crisis. It is a crisis that may well lead to deep budget cuts affecting essential government services like education, healthcare and transportation. Some in Albany are even talking about higher taxes. But something is seriously wrong with this picture. New York stands virtually alone among all other states in its practice of not collecting any excise taxes on cigarettes sold through Native American reservations to non-tribal members. This non-enforcement policy has never made sense. Today – in the midst of a budget crisis in which teachers and police officers may lose jobs – this policy is simply absurd."
Of course, we agree, and everyone concerned with the state's fiscal mess should be joining with us on this collection crusade-as is the Business Council of Westchester, whose president Barbara Gordon penned the following for the Westchester Journal News: "Westchester residents awoke on a recent morning to news that Westchester County is facing a $60 million budget hole...But even higher state taxes are on their way...There's no question about it: New York state has become a taxing machine. We've taxed everything in sight; we're even going after soda pop now. So with all the budget pain and new tax proposals out there, one would think that the state would actually be collecting the revenue it is due. Well, one would be wrong."
The one sacrosanct area is the Indian cigarette exemption: "An estimated $1 billion in cigarette taxes goes uncollected every year in New York. Some estimate the unrealized revenue as high as $1.6 billion.The lost taxes are from cigarettes sold on Native American reservations in New York or online (even though that's illegal in New York) by Native American tribes.This is not a matter of sovereignty. New York has the power to collect tax on cigarettes that are sold to New Yorkers — whether those cigarettes come from another state, another country or even a reservation.The Supreme Court said so."
And if this money was collected, according to Gordon, there would be less pain all around: "Gov. Paterson could begin collecting these tax dollars tomorrow and a.) eliminate his proposed tax increases, b.) restore funding to our schools, or c.) eliminate the planned health-care cuts. What is he waiting for?"
Indeed, why the wait? And why, on top of the non-enforcement, would you increase the tax on a pack of smokes? As Gordon also wonders: "Gov. Paterson just proposed another $1 per-pack tax hike on cigarettes sold here. It will only exacerbate an already terrible problem. The higher the taxes, the higher the incentive to avoid the tax."
And the budget gap that Gordon writes about in Westchester is being replicated in counties all over the state. So, while this collection of an overdue Indian cigarette levy is no panacea, it will do every county and municipality-not to mention the state treasury-a heck of a lot of good.
We'll give Gordon the last word: "High taxes and spending are ruining New York state. But with the deficits we're facing now, it defies reason not to collect taxes already on the books, taxes that are legally owed. We can't afford to wait any longer, Gov. Paterson. We need you to step up and start collecting the cigarette taxes now."