Gov. Paterson signs cigarette bill; Hundreds of jobs at stake

The tax fight between tribes and New York State regarding the sale of cigarettes at reservation stores to non-Natives continued this week. Gov. David Paterson signed a bill Monday that could result in the loss of hundreds of jobs at tribally owned stores throughout the state.

The bill makes suppliers liable for applying tax to cigarettes sold to wholesalers, who would in turn need to certify that the tax will be applied when they supply tribal retailers. A failure to do so would subject them to a loss of license and charges of perjury.

While Natives are exempt from paying tax on tobacco products, the state, under pressure from non-Native convenience store owners, has attempted to force Natives to charge tax when selling the tobacco products to their non-Native customers for decades. A law passed in 2004 made those types of sales illegal by state law, but former governor George Pataki opted not to enforce it. Paterson’s signing of Bill SO8146B proves he has other intentions.

“This law has not been adequately applied for far too long giving non-Indians easy access to tax-free cigarettes both on the reservations and over the internet,” said Gov. Paterson. “However, the signing of this bill should not be seen as anything other than enforcing the tax laws of New York in a fair and effective manner. My commitment to the sovereign powers of New York’s Indian Nations has not and will not waver and I will continue to seek a comprehensive negotiated solution with all of New York’s Indian Nations.”

Despite Paterson’s declaration, tribal members have immediately responded with criticism and assertions that the bill will cause undue harm and the potential loss of hundreds of jobs in the North Country alone.

““It would be like another General Motors closure,” said St. Regis Mohawk Tribal Council Chief James Ransom. “I don’t think people realize just what the economic impact would be on our area, especially if you think about the ripple effect.”

Tribal Chief Barbara Lazore added, “We understand the state’s need to balance the budget, but the problem has been created by overspending in Albany, not by us.”

The Akwesasne Petroleum Co-op, which overseas Akwesasne’s many tobacco retailers, immediately issued a press release criticizing the bill and stating their intentions to explore other avenues.

“This bill is a deliberate attack by New York State to interfere in the treaties of the sovereign Iroquois Confederacy, which have stood for hundreds of years with the government of the United States,” the Co-op stated. “Signing it does not show good faith on the side of the governor who has repeatedly said he wants to seek a negotiated solution.”

“The member stations of the Akwesasne Petroleum Co-op want to ensure their customers and employees that they will explore all options necessary to protect our Treaty rights, their jobs and continued customer service.”

The Co-op is urging the governor to “honor our Treaties and honor his word by seeking an amicable resolution to this matter.”

Paterson said the next step will be to develop a system “within 60 days” to enforce the certification process.

The St. Regis Mohawk Tribe said Paterson’s office has notified them that they can expect to have a meeting in the New Year.