Thursday, March 16, 2006

Smoke at the End of the Tunnel

In a startling move both the NYS Senate and the Assembly have refused to pass the governor's proposed cigarette tax increase unless the state begins to enforce the tax laws against Indian retailers. In a story the other day in the Buffalo News, Tom Precious reported that, "The Senate turned down the governor's plan to raise the state's cigarette tax from $1 to $2.50 per pack, with Bruno saying such an increase would be 'aiding and abetting those that smuggle and cheat' through the sales of tax-free cigarettes."

In taking this stand both houses "rejected another year's delay in collecting tax on Indian sales..." In an interesting twist the Assembly went one step further "by requiring tobacco wholesalers to turn in their licenses June 30th. They would get new licenses only if they showed they had sold no tax-free cigarettes between the budget's passage and June 30th."

It appears that the handwriting may be on the wall for tax dodging Indian retailers. If, as we expect, a lawsuit is filed shortly the pressure will really be on the governor to stop his dilatory tactics and simply enforce the law.