Updated 08/15/2008 06:29 AM
State looking to tax Indian tobacco products
NEW YORK STATE – “We continue to ask New York State to honor our treaties," said Richard Nephew, of the Seneca Indian Nation Legislative Council.
According to the Seneca Nation of Indians, treaties are the supreme law of the land. Federal law they say Governor Paterson will violate if he signs a bill that would require taxes on all tobacco products sold by Indian tribes to non-Indians.
Lawmakers passed the bill in both houses and say it could bring in hundreds of millions of dollars in revenue for the state, which is a plus during this economic downturn.
Seneca officials say its burden their people shouldn't have to bear. Fewer customers are willing to pay the increased price.
"We're not part of the problem, we're actually part of the solution to New York's economic woes right now," Nephew said.
The Indian Nation contends it’s a major contributor to the Western New York economy, raking in $313 million in tobacco sales in 2007. They say if the state taxed those sales, it would be a $71 million loss to their economy.
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"Not withstanding what is obviously no tax collection the state still comes out ahead. It just doesn't come into the Albany trough. It goes directly to the people of Western New York and to the businesses of Western New York," said Robert Odawi Porter, Seneca Nation Senior Policy Advisor and Counsel.
Westchester Senator Jeff Klein, sponsor of the Senate bill, says Indian tribes in the state are the ones violating state law by not taxing non-American Indians online and on reservations, saying if the state has to choose between cutting from education, healthcare and other vital services, enforcing state taxation laws on Indian reservations is a clear choice.
A top aide met privately with Seneca officials Thursday and no agreement was reached. They would not say whether they're willing to take legal action if the governor signs the bill.
“We're going to continue to try and educate the governor and legislature on what we do," Nephew said.
Errol Cockfield, spokesman for the governor, says the legislature hasn't sent them the bill yet, but says once they receive it, it will be reviewed and discussed with interested parties.