State’s cigarette tax law moves into effect

Smokers who purchase their cigarettes from Indian reservation stores around New York State may be able to continue doing so for the time being, if a federal order granted to the Cayugas and Senecas on Aug. 31 is applied to all tribes.

On Aug. 30, a state court lifted a previous order that had halted the New York’s plans to force tax collection on cigarettes sold to non-Natives on Native territory beginning Sept 1. The Senecas and Cayugas appealed the decision and won a temporary restraining order Tuesday. They’re due back in court next week.

There are conflicting reports, however, regarding who the order applies to and Gov. David Paterson’s office told the Associated Press Wednesday that they are still planning to enforce the taxation on other New York reservations.

The law, which has been in place for several years but has never been enforced until this week, requires tribes to pay tax on all major brands of tobacco before it can be delivered by the wholesaler. As tribes are sovereign and immune from taxation, the issue has created state-wide unrest among Natives and non-Natives alike. Among the many arguments is one that Natives are not required to pay tax, but will be forced to do so by the system the state has imposed. Another major point being argued by tribal leaders is that all tribal territories are sovereign nations and not required to abide by state taxation regulations.

On Aug. 31, Akwesasne’s many convenience stores were busy with customers stocking up on their supply of major brands of tobacco. Any stock stores currently have of the major brands will continue to be sold at tax free prices. However, any product ordered from wholesalers on or after Sept. 1 will fall under the newly enforced law. One store attempted to order more major brands late Tuesday night on the eve of Sept. 1 but the wholesaler regretfully declined, stating that the invoice would have the date of Sept. 1.

“Oh we were swamped yesterday,” said Melinda Thompson-Walk, manager of Kanienkehaka Convenience Store, speaking of the many customers who purchased multiple cartons of cigarettes on Aug. 31.

Stores in Akwesasne are planning to let their supply run out and simply sell Native-made brands of tobacco. Those, store owners say, have been outselling the major brands anyway.

“Our cigarettes we make here are just as good as national brands and it’s just a smart choice,” Thompson-Walk said. “I think we’ve already captured that market.”

Akwesasne stores sell around a dozen different Native-made brands of tobacco. Senecas, Chiefs, Tomohawks, Discount, and Signals are just a few.

Justin Tarbell of the Tarbell Management Group, which owns several tobacco-selling stores in Akwesasne, believes the Aug. 31 restraining order applies to all tribes but said the state will likely get its way once again and that the order is just one more battle in the long war between tribes and New York on the issue of cigarette taxation.

“The ultimate bottom line is we will not be New York State tax collectors…period” said Tarbell. “How aggressive and disrespectful New York State has been to our nation…they say they want an even playing field (but) they want us right off the playing field.”

Tarbell said the state’s issue is a fiscal matter and the only long-term solution will be a political one.

“New York State is starving for money and we’re an easy target because we don’t vote,” he said. “We don’t vote so they don’t give a crap about us.”

Although Tarbell wasn’t optimistic about the state giving up the fight anytime soon, he said that Akwesasne stores can definitely survive without selling major brands of tobacco.

“We’re going to survive and we will prevail and be successful,” he said. “We all know (national brand corporation) Phillip Morris has pushed this through…This is a race-based taxation system (the state is imposing)…maybe it’s time we take a stand and start supporting our own people.”

On Aug. 31, the St. Regis Mohawk Tribe issued a release stating that on Aug. 24, 2010 they filed a lawsuit in U.S. District Court for the Northern District of New York that challenges the system of tax collection the state is requiring tribes to abide by.

“We have valid concerns about this New York State law and how it infringes on our territory and on our self governance,” said Chief Monica Jacobs. “The intent of this law is clearly to interfere with our internal affairs.”

Chief Randy Hart added, “The State of New York is forcing the Tribe to carry out and enforce state law and regulations…this is in clear violation of the Tribe’s rights as a sovereign entity exercising jurisdiction over its territory. The State Legislature cannot force the Tribe to collect state taxes and it cannot lawfully interfere with Tribal internal affairs.”

Many Akwesasne stores stocked up on their supply of major brands of tobacco. Some store owners say they have about a month’s supply left to be sold; others say they’ll run out even sooner.