State lawmakers in New York have given final passage to a measure that would end tax-free cigarette sales by Native American retailers to non-tribal members.
The bill, which died in the State Senate in June, unexpectedly was resurrected and recently passed during a one-day special session. It seeks to obtain what lawmakers say could be at least USD 400 million (EUR 266.7 million) in taxes not currently collected.
Maurice A. John Sr., president of the Seneca Nation, said the tribe will “pursue all legal remedies to enforce our federal treaty rights to sovereignty.” The Senecas call the tax-collection effort an affront to treaties dating to the 1700s.
The cigarette legislation bans tobacco manufacturers from selling cigarettes without a state tax stamp to wholesalers who do not certify that they will not resell the cigarettes without applying the state tax. Wholesalers, however, still could supply untaxed cigarettes to Native American retailers for sale to tribal members, who can legally purchase cigarettes tax free. How many of these untaxed cigarettes can be sold to tribal members remained unclear.
Sources say efforts were under way to amend the measure to ban all sales of untaxed cigarettes and to establish a refund system for Native American purchasers.
It is estimated that the state loses USD 1.7 billion annually through tax-free cigarette sales by Native American retailers. (pi)