According to the Buffalo News, the NY State effort to stamp out the illegal sale of untaxed cigarettes by a criminal enterprise masquerading as a separate nation may have actually commenced: "The state has seized a Seneca tobacco retailer's truck containing thousands of cartons of cigarettes, a move some are seeing as a test by the government as Albany looks to start collecting taxes on Indian cigarette sales in the months ahead. The truck was seized Monday by at least one state tax and finance agent as it made its way between the tribe's Cattaraugus and Allegany reservations. Brad Maione, a tax department spokesman, said the state confiscated "thousands of cartons of cigarettes that did not have a New York state tax stamp as required by law."
But, while the Indians are still circling the wagons, the battle is not yet over: "The seizure came just one day before Seneca Nation businesses asked a local judge to delay the federal government's ban on mailing cigarettes until their appeal can be heard by a higher court. The government, during a hearing today, countered by asking the same judge to put on ice his temporary prohibition against the collection of taxes on cigarettes mailed by Seneca businesses.The dueling requests are part of the fallout from U.S. District Judge Richard J. Arcara's order last month upholding the crux of a new federal law that Seneca business owners say will cripple their mail-order tobacco operations."
And the interdiction has produced the usual tearful pleading: "Right now, they're all shutting down," William Parry, the owner of Wolf's Run in Irving, said after the two-hour court session. "There are a lot of people out of work." No recognition of all of the legitimate, tax paying, convenience store and bodega operators who have been forced to close because of the Indian buttleggers.
And then there is the sale and closing of Finkle Distributors in Jamestown-forced out by the tax increase and the years of non-enforcement: "California-based Core-Mark Holding Co. on Monday finalized its deal to purchase Finkle Distributors and plans to let go more than 100 of Finkle's 240 local employees in the next several months. "Moving forward, there will be over 100 leaving," Finkle Distributors Chief Executive Officer Dan Finkle said today."
Eventually, all 250 Finkle employees will be gone from the state: "Dan Finkle, who is staying on with the new company as an executive, said most of the employees staying will be drivers, sales people and office workers. Finkle said the distributing business is a tough one to be in at this time. "We're not pocketing [the revenue from the sale]," Dan Finkle said. The cigarette business was much of Finkle's distributorship, he said, and that's a "dying business."...Fulton County Economic Development Corp. President Michael Reese said today it was his understanding only "a small number of employees were going to stay in Johnstown," but he said he didn't have the latest information."
All of this could have been avoided, of course, if NY State had enforced the law against the sale of untaxed cigarettes-years ago when it was clear that it was permissible to do so. But the fecklessness of a succession of governors has allowed the entire situation to deteriorate into a humourless farce-subject to endless litigation paid for by the proceeds of criminal activity. And, even now, if the state would provide stampers with an extra 10 cents a pack handling fee, the next distributor closing just might be avoided.
As the Buffalo News points out: "The new law is viewed by both critics and supporters as sweeping legislation with billions of dollars in tax revenue and thousands of jobs at stake, many of them in Western New York. During today's session, Arcara heard from government lawyers who argued that a stay of his injunction against the taxing portion of the law is warranted because of the public health risks associated with untaxed cigarettes."
The tax revenue at stake is the money that the Indians have illegally pocketed-literally stolen right out of the cash registers of bodegas all over NYC-and the jobs won't be lost if an industry can be salvaged-they just won't be jobs based on black market activity-and the federal PACT law is already starting to pay dividends: "Tensions are already high on the reservations. Between the new federal PACT Act targeting mail order shipments and a looming state effort to halt tax-free cigarette sales by Indian tribes in New York, Seneca business owners see their thriving tobacco trade in jeopardy. For years state officials have expressed concern about violence erupting, as was seen in the late 1990s the last time the state tried to collect the cigarette tax. While the state's cigarette tax collection effort on Indian cigarette sales to non-Indian consumers is not due to start until Sept. 1 at the earliest, Maione said it is already illegal to transport cigarettes without a New York state tax stamp on "New York property."
And if the buttleggers are itching for a fight, then the state should be more than willing to provide them with one. After all, with hundreds of millions of tax dollars in the mix, it's certainly worth fighting for.