Dawn of New Era of Tax Fairness in New York
The state Tax Department is moving swiftly to implement tax collection on Indian sales of cigarettes to non-Indians following a decisive court victory for tax fairness.
On June 21, the Appellate Division of State Supreme Court unanimously upheld a lower-court ruling that the Department followed proper procedure in adopting regulations governing the tax collection initiative. The plaintiff -- the Seneca Indian Nation -- vowed to appeal to the state Court of Appeals.
The Department said that effective immediately, "wholesale dealers (including agents) are required to collect the cigarette excise tax and prepaid sales tax on all cigarettes sold for resale on an Indian reservation to non-Indians and non-members of an Indian nation or tribe. All packs of cigarettes sold by wholesale dealers to Indian nations and tribes and reservation cigarette sellers are required to have New York tax stamps affixed to them."
See Newest Bulletin from NYS Dept. of Taxation & Finance
Reaction From Senecas: 'NY Will Never Collect a Cent From Us'
Tribes Claim Cigs Made on Reservations Immune From Taxation
The Seneca Indian Nation continues to falsely claim that its own reservation-made cigarette brands are unaffected by implementation of the state's new tax collection law because that product is not delivered to them by a non-Indian wholesale distributor obligated to prepay the tax to the state.
However, Section 471e of the Tax Law states clearly that "all cigarettes sold on an Indian reservation to non-members of the nation or tribe or to non-Indians shall be taxed, and evidence of such tax will be by means of an affixed cigarette tax stamp." Thus, in NYACS' view, despite the Senecas' claims, Indian-made cigarettes are indeed subject to state taxation as well. This issue is certain to end up in court in the months to come.
Resources on the Tax Fairness Issue
Enforce the Law/Collect the Tax Coalition
NYACS and other organizations unite around the goal of tax fairness
Visit Web Site
15-year Chronology of the Tax Fairness Issue (1994-2009)
Court decisions, legislation, administrative action and inaction
Link to long sad tale
The Labor Market Effects of a Uniform Imposition of Cigarette Excise Taxes in New York State
2004 Study by economist Brian O'Connor
Link to 2004 analysis
U.S. Supreme Court Attea Decision (1994)
Unanimous court rules NYS can collect taxes on Indian sales to non-Indians, and “Indian traders are not wholly immune from state regulation that is reasonably necessary to the assessment or collection of lawful state taxes”
Link to Attea ruling
Text of New York State Tax Fairness Law
Sections 471-e and 284-e of the state Tax Law, requiring the Tax Department to collect taxes on cigarettes and motor fuel purchased by non-Native American New Yorkers at Native American retail stores
Link to the law
If Violence Should Erupt, Now There's a Law to Deal With It
Anti-Terrorism Act of 2001 makes it a felony to threaten certain violent acts with intent to influence government policy through intimidation
Link to the law
Press Release Announcing Latest Tax Fairness Lawsuit
Assemblyman Townsend and Dabiew's Market file Artile 78 action against Governor Spitzer and the Tax Department
Link to press release
Article 78 Petition
The Townsend/Dabiew court papers filed in New York State Supreme Court
Link to petition
Recent Chronology of Delay Tactics (2006-2008)
Foot-dragging and broken promises from the executive branch thwart the will of the people of the State of New York, acting through their elected Legislature
Link to delay tactics
2007 Preliminary Injunction, Judge Sconiers
Ruling barred New York State from enforcing tax collection on Indian sales to non-Indians until it issues tax exemption coupons to tribes to protect their exemption on sales to other Indians
Link to Sconiers ruling
2006 NYACS Suit Dismissal, Judge Kavanagh
Ruling in Article 78 proceeding that convenience store plaintiffs lacked “standing” to challenge Pataki administration’s refusal to enforce tax fairness law
Link to Kavanagh ruling
Drowning in Double Standards
Several dozen state laws and regulations that licensed, non-Indian retailers have to comply with, but which New York lets unlicensed Indian retailers ignore
Link to double standards