"We find it curious that the Cayuga Indian Nation of New York has joined in the legal fight against the implementation of a system that would allow the state to collect taxes on sales of cigarettes to non-Indian consumers while preserving tribal members’ rights to purchase them tax-free.

The Cayugas are saying that the whole concept of taxation is a violation of their sovereignty, and they add that being required to collect taxes on non-tribal sales would destroy their business. They no longer seem to care about the existence of a state taxation regulatory system that would preserve tax-free purchases for tribal members by using coupons or a pre-determined tax-free allotment to each tribe.

This system just came into place this summer when Gov. David Paterson finally realized that it was time to level the playing field for non-Indian retailers and begin collecting these taxes. The lack of a coupon system or something similar is what had led to a court injunction preventing collection before.

Prior to Paterson’s Sept. 1 plan being announced, the Cayugas had clung to the lack of a coupon system as the reason its officials couldn’t be prosecuted by Cayuga and Seneca counties for tax evasion.

“If the county makes up a system involving two piles of cigarettes, the only way to determine how many untaxed cigarettes the store can sell will have to involve coupons of some type,” national attorney Lee Alcott told an appellate court in April 2009. “So everything comes back to the state and (its) tax department’s policy of forbearance.”

That argument, by the way, succeeded for the Cayugas in their effort to block prosecution. In fact, it was the linchpin of the state Court of Appeals decision in their favor earlier this year."

Get the Story:
Our View: Cayugas can’t have it both ways on tax (The Auburn Citizen 9/5)

Relevant Documents:
ATF Letter on Tribal Consultation (May 19, 2010)

Prevent All Cigarette Trafficking Act:
H.R.1676 | S.1147

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