Governor David A. Paterson today signed a bill to curb the sale of untaxed cigarettes to Indian retailers in violation of the cigarette tax laws of New York State. The New York State Department of Taxation will have 60 days to issue a certification form and prepare to receive the certifications that will be submitted. Governor Paterson signed bill A11258A/ S 8146-B at a ceremony in Utica.
Under Article 20 of the Tax Law, cigarettes sold by Indian retailers to non-Indians must be taxed. The bill signed by Governor Paterson today will prohibit cigarette manufacturers from selling unstamped cigarettes to stamping agents who have not provided them with a certification, under penalty of perjury, that the cigarettes will not be resold in violation of Article 20. Agents must provide the Tax Department with any certification they give to a manufacturer.
"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 Governor 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."
Although cigarettes sold by agents to retailers for re-sale to non-Indian purchasers must bear tax stamps, the State has, for many years, adopted a policy of non-enforcement, and unstamped cigarettes continue to be sold by agents to Indian retailers who sell them to non-Indians at discount prices.
Governor Paterson added: "Tomorrow, I will present my 2009-2010 budget proposal and while we will continue to aggressively and responsibly address New York's current budget crisis, this bill is not only about collecting revenue for the State of New York, it is also about protecting the health of our citizens. Smoking has long been a tragic public health crisis in New York and around the world. In recent years, the New York State cigarette tax has been one of our most effective tools in addressing this crisis. To the extent that the tax is undermined, our efforts to fight smoking are also undermined."
I live about 10 minutes away from a reservation where there are many Native American smoke shops and gas stations. This legislation will have a huge impact and, of course, tax all the wrong people.
While we can make this about public health, it really is about the state's bottom line. They see this (and always have seen this) as a potential revenue stream. They can bring in a lot of money through this tax, although it won't be enough to put a serious dent in our deficit.
I will have more on this later. But for now, this will sure be a controversial development today.
