Opinion: Tobacco taxes on New York reservations

"Twelve years ago, the United States Supreme Court ruled that New York could legally tax Indian retailers on their cigarette sales to non-Indians, and the Legislature enacted a law, which took effect last March, requiring just that. But the executive branch has refused to enforce it, illegitimately depriving retailers and taxpayers of revenues as high as $576 million a year.

That is why I filed a lawsuit last spring against these Indian retailers, including those from the Unkechaug Poospatuck Tribe and the Shinnecock Indian Nation, both in Suffolk County. Cigarette taxes help state and local governments meet their obligations to their citizens. Every non-taxed sale of a carton of cigarettes means that there is less money for new schools, hospitals and roads. As a result, our overall tax burden is increased.

These levies were imposed for another important public purpose. Anti-tobacco groups have long argued that a higher cigarette tax helps discourage smoking by teenagers. The city’s health commissioner puts it this way: “Increasing tobacco taxes is the single most effective way to reduce tobacco consumption, particularly for kids.” That disincentive disappears when tax-free cigarettes are readily available at Indian smoke shops or on the Internet.

Finally, the government’s enforcement failure erodes public respect for the rule of law itself. The concept of equal protection, which obliges everyone to obey the law, is a great feature of American democracy. When the New York tax commissioner named the fear of Indian violence as reason to hesitate to enforce the cigarette tax equally, he set a deplorable precedent. There should be no “rioter’s veto” that stops law enforcement.

Indian retailers claim that the state’s effort to tax their cigarette sales is “like New York taxing New Jersey.” Nothing could be further from the truth. The Supreme Court put such arguments to rest in 1994 when it ruled that Indian sovereignty did not govern sales of any product to non-Indians.

Shouldn’t everyone who benefits from doing business with New Yorkers share, on equal footing, the responsibility of keeping our communities strong and our children healthy?"

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John Catsimatidis: Smoke Damage (The New York Times 1/14)

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