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Old 05-04-2006, 06:41 AM   #1
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Lawsuit: Collect Indian Sales Tax

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Lawsuit: Collect Indian Sales Tax




Wednesday, May 03, 2006

By Erik Kriss

Staff writer
New York convenience stores sued Gov. George Pataki on Tuesday to compel him
to enforce a law he signed requiring tax collections on cigarette and
gasoline sales to Indian retailers.
The New York Association of Convenience Stores, along with Canastota-based
Nice N Easy Grocery Shoppes and MWS Enterprises Inc. of Western New York filed
suit in state Supreme Court in Albany.
The lawsuit maintains a 2005 state law, signed by Pataki, required that
wholesale distributors begin collecting taxes March 1 on the product they sell to
Indian stores. The state was supposed to set up a system allowing for
tax-free sales only to Indian customers.

Non-Indian merchants say they're being undercut by tax-free sales, which they
claim cost taxpayers $450 million annually.
Distributors and state tax Commissioner Andrew Eristoff also are named in the
suit.
The U.S. Supreme Court ruled in 1994 that states could collect taxes on
Indian sales to non-Indians.
Pataki reached "tax compacts" with Indian nations in 1997, but quickly
abandoned them after protests. He has resisted laws requiring his administration
to collect the taxes, saying he wants to try the tax compact route again.
"We find ourselves in the position of suing the governor just to get him to
do his job," convenience stores association President James Calvin said at a
news conference in Albany announcing the lawsuit.
Pataki is not seeking re-election. The leading candidate to succeed him,
state Attorney General Eliot Spitzer, will defend the Pataki administration in
the suit.
But Spitzer has said that as governor he would enforce the tax-collection
law, and he has been cracking down on untaxed Internet and mail-order cigarette
sales. Nonetheless, "the state is being sued, and the function of the
attorney general is to defend the state," Spitzer spokesman Marc Violette said. "We
will do so vigorously."
Pataki denied Tuesday that he is failing to enforce the law.
"We have checked with the tax department and the counsel's office and we are
confident we are doing what we are required to do by the law. I have always
said, from the beginning, that the best way to do this is through a compact,
through consensus, and we are going to continue to strive to do that."
Calvin said his group wouldn't necessarily oppose a compact "if the solution
is fair to licensed retailers and taxpayers. Attempts by Pataki in the past
have fallen well short of that."
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Old 05-04-2006, 06:41 AM   #2
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Suit Seeks Taxing Indian Retail Sales
Stores sue to enforce 2005 law granting tax-free sales only to Indian
customers.

Wednesday, May 03, 2006
By Erik Kriss
Albany bureau
New York convenience stores sued Gov. George Pataki on Tuesday to compel him
to enforce a law he signed requiring tax collections on cigarette and
gasoline sales to Indian retailers.
The New York Association of Convenience Stores, along with Canastota-based
Nice N Easy Grocery Shoppes and MWS Enterprises Inc. of Western New York filed
suit in state Supreme Court in Albany.
The lawsuit maintains a 2005 state law, signed by Pataki, required that
wholesale distributors begin collecting taxes March 1 on the product they sell to
Indian stores. The state was supposed to set up a system allowing for
tax-free sales only to Indian customers.

Non-Indian merchants say they're being undercut by tax-free sales, which they
claim cost taxpayers $450 million annually.
Distributors and state tax Commissioner Andrew Eristoff also are named in the
suit.
The U.S. Supreme Court ruled in 1994 that states could collect taxes on
Indian sales to non-Indians, but the issue has been building since the 1980s.
Pataki reached "tax compacts" with Indian nations in 1997, but quickly
abandoned them after violent protests. He has resisted laws requiring his
administration to collect the taxes, saying he wants to try the tax compact route
again.
"We find ourselves in the position of suing the governor just to get him to
do his job," convenience stores association President James Calvin said at a
news conference in Albany announcing the lawsuit.
Pataki is not seeking re-election this year. The leading candidate to succeed
him, state Attorney General Eliot Spitzer, will defend the Pataki
administration in the lawsuit.
But Spitzer has said that as governor he would enforce the tax-collection
law, and he has been cracking down on untaxed Internet and mail-order cigarette
sales.
Nonetheless, "the state is being sued, and the function of the attorney
general is to defend the state," Spitzer spokesman Marc Violette said. "We will
do so vigorously."
Pataki denied Tuesday that he is failing to enforce the law.
"We have checked with the tax department and the counsel's office and we are
confident we are doing what we are required to do by the law," he said. "I
have always said, from the beginning, that the best way to do this is through a
compact, through consensus, and we are going to continue to strive to do
that."Calvin said his group wouldn't necessarily oppose a negotiated tax compact
with Indian nations "if the solution is fair to licensed retailers and
taxpayers. Attempts by Pataki in the
past have fallen well short of that."
Calvin cited a proposed deal with the Mohawk Indians he said would have
allowed most of their retailers to continue selling tax-free.
"That's not acceptable," he said.
Pataki said most New Yorkers are turning to the Internet and the mail to buy
cigarettes.
Still, Russell Sciandra, director of the Center for a Tobacco Free New York,
cited a Pataki Health Department survey as the basis for his estimate that
50,000 to 75,000 smokers would quit if they had to pay taxes and that
"thousands of kids would not start."
Sciandra also hailed a bill proposed by Sen. Michael Nozzolio, R-Fayette, and
Assemblyman Bill Magee, D-Nelson, that would outlaw the sale of untaxed
cigarettes to any wholesaler that itself sells untaxed cigarettes.
Calvin estimated gasoline prices at Oneida Indian Nation-run Sav-On stores
tend to be about five cents cheaper per gallon than at nearby non-Indian
stores.
Oneida Nation spokesman Mark Emery would not comment on the lawsuit.
Cayuga Nation lawyer Dan French said it's hard to get "meaningful results
through the courts" and said the best resolution is "through comprehensive
negotiations with the state and municipalities."
Leaders of the Onondaga Nation could not be reached for comment Tuesday.
The lawyer for Milhem Attea & Bros. Inc., one of five wholesalers named in
the lawsuit, said the company has followed proper procedure: seeking and
relying on an advisory opinion from Pataki's Department of Taxation and Finance
allowing it to sell untaxed cigarettes to Indian retailers.
"Milhem Attea & Bros. Inc. has at all times complied with the law to the
extent it was being enforced," lawyer Joseph Zdarsky said.
Erik Kriss can be reached at [email protected] or (518) 463-8038.
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Old 05-04-2006, 06:41 AM   #3
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Stores Sue To Force Collection Of Taxes From Indian Retailers
5/2/2006, 2:42 p.m. ET
By MARK JOHNSON
The Associated Press
ALBANY, N.Y. (AP) Convenience store operators on Tuesday sued Gov. George
Pataki to compel him to enforce a new law requiring tax collection on tobacco
products and gasoline sold to Indian businesses.
The New York Association of Convenience Stores says Pataki's failure to
collect taxes on the goods before they reach the reservations costs taxpayers
$450 million a year and costs businesses $1 billion a year.
NYACS President James Calvin said Pataki is "flouting his constitutional
duties" by not enforcing the law, which took effect March 1. Businesses located
near reservations say they suffer a competitive disadvantage because they must
charge subsantially higher prices."This is an issue that has crippled the
convenience store industry and is getting progressively worse," Calvin said.
"If there is going to be a tax on these products, let's administer them
fairly, let's administer them equally."
State tax Commissioner Andrew Eristoff earlier this year said that he
wouldn't enforce the law on reservation and Internet sales to non-Indians until
Pataki had more time to settle the long-standing land claims of several tribes.
That delay, however, was rejected by the Legislature.
An attempt to collect cigarette taxes resulted in violence in the 1990s when
the tribes moved to protect their sovereignty.
A study done for the State Health Department last year found that more than a
third of New York smokers regularly avoid the state's high cigarette taxes
by buying from Indian reservations, the Internet or duty-free shops. In 2005,
9.5 billion packs of cigarettes were sold in New York state without being
taxed or stamped.
Pataki, defending his position, said the state was not losing much in the way
of tax dollars because most smokers seeking a tax break order cigarettes
through the mail or the Internet.
"We have checked with the tax department and the counsel's office and we are
confident we are doing what we are required to do by the law," he said. "I
have always said, from the beginning, that the best way to do this is through a
compact, through consensus, and we are going to continue to strive to do
that."
State Attorney General Eliot Spitzer earlier this year said his office would
consider filing suits against the wholesalers who sell to the Indian owned
businesses. Those suits are "still under consideration," spokesman Marc
Violette said.
The NYSACS suit puts Spitzer, who has called for the enforcement of the law,
in the awkward position of defending Pataki's position.
"When it comes to the role of the office, it's very clear," Violette said.
"We defend the state."
A bill introduced in the Legislature would expressly prohibit cigarette
makers from selling cigarettes to wholesalers who knowingly sell untaxed
cigarettes.
"That would work a lot faster than the lawsuit," said Russell Sciandra of the
Center for a Tobacco Free New York.
A spokesman for Pataki didn't immediately respond to a request for comment.
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Old 05-04-2006, 06:43 AM   #4
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FROM: THE SALAMANCA PRESS NEWSPAPER

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Tribes Rally Against State Taxes


By:SHARON TURANO, City Editor
05/02/2006



(http://www.salamancapress.com/site/p...ewsid=16571914)



IRVING - State attempts to collect tax on Native American sales to
non-Natives on reservations are being viewed as the first step to take away Native
rights.
Although some state officials have said the tax should be collected, Native
Americans report state sales tax collections violate treaties with the federal
government.
If one such treaty can be broken, they fear, others - including those that
identify Native land - will not be honored.
"This is more than gas and cigarettes - it's the land I hunt on, the creeks
I fish in," said Seneca Rick Jemison at an anti-tax rally held Saturday on
the Seneca Nation's Cattaraugus Territory.
Jemison, along with representatives from the Unkechawg, Mohawk and Tonawanda
tribes spoke at the rally, put on by the Coalition for Native Rights.
The coalition was formed to end any further loss of rights, recover rights
and exercise rights, according to information provided at the rally.
"The current struggle focuses on our right to develop economy," reads the
information.
Treaties with the federal government that include addressing commerce and
naming territories do not have a timeframe, the information reports.
"There was permanence to them, to last forever," it states.
"We want to continue to do business, work at our jobs and do our best to earn
an honest living," said Jemison.
He and others alleged Attorney General Eliot Spitzer, running for governor,
has "done all in his power" to stop the sales by working with wholesalers,
transporters, credit card companies to stop deliveries of product Native
Americans sell tax-free.
"Spitzer and his cronies are quietly scheming to break our treaties, and, as
a result, oppress our Native people," said the information provided.
Jemison proposes another idea instead.
"Leave us alone," he said.
"It's discrimination and a threat to economic freedom," said Seneca Marilyn
Anderson about the sales tax collection attempts.
Harry Wallace of the Unkechawgs of Long Island agreed. He said that tribe is
ready to stand united with the Senecas against taxation attempts.
"Poverty is not an option," he said. "All we are doing is providing food for
our families and a future for our people," said Wallace.
Seneca Don White already sees a result of the taxation attempts.
"We live in conflict. That's simply unacceptable," he said.
Thruway passersby may also have gotten that message. Hundreds at the rally
relayed it by holding signs and banners that could be seen from the road.
Native Americans say they would like them to remember it when going to the
polls.





Bradford Publishing 2006
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Old 05-04-2006, 06:43 AM   #5
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Convenience Stores Plan To Sue Pataki

Group wants gas, cigarette taxes collected from Indians

Wednesday, May 3, 2006


O-D Albany bureau

ALBANY A coalition of convenience stores said Tuesday it is suing Gov.
George Pataki over his decade-long refusal to collect taxes on tobacco and
gasoline sold by American Indian merchants.



Pataki has flouted his constitutional duties by ignoring laws that command
the state to collect the taxes, according to the coalition. In doing so, he's
"aiding and abetting" an "epidemic" of people skirting the tax laws by going
to Indian reservations for smokes or buying cigarettes through the Internet,
it said.



"The constitution says the governor shall faithfully carry out all laws,"
said James Calvin of the New York Association of Convenience Stores. "He doesn't
get to pick and choose which laws to enforce."



Verona business owner George Eggen of the Verona Hotel said he doesn't think
the state government will enforce the law, even if a lawsuit is brought
against the governor.



"The governor is just going to leave it in the hands of somebody else until
January," Eggen said. Pataki is not running for re-election in November.



The Oneida Nation in Verona has applied to the Indian Bureau of Federal
Affairs for land-in-trust status, which, if granted, means Nation property would
not be subject to paying taxes. If successful, that move would legally
circumvent the U.S. Supreme Court's February 2005, ruling that the land was subject
to local taxes and regulation.



Calvin's group was joined in the lawsuit by two convenience-store chains
headquartered near Indian reservations in Central and Western New York:
Canastota-based Nice N Easy, which operates about 60 stores, and Amherst-based MWS
Enterprises, which runs 40.



Pataki said he won't direct the state Tax Department to collect the taxes
this year, instead working to make a deal, or compact, with the tribes.



"I've always said from the beginning the best way to do this is through
compacts, by consensus," he said. "We're going to continue to strive to do that."



Besides Pataki, the lawsuit names five cigarette distributors that supply
the reservations with untaxed cigarettes, including Frank Colucci Inc. of
Niagara Falls.



The long-running tax issue is no small matter: hundreds of millions of
dollars are at stake. On the one side are convenience stores that compete with
reservation stores and state legislators who view the taxes as a way of helping
to pay for the state budget. Joining them are anti-smoking groups that want to
see cigarettes made more expensive.



On the other are customers who enjoy cheaper prices and Native American
tribes that insist the law would intrude on their sovereignty.



Last year, the state Legislature again passed a law demanding the Pataki
administration begin collecting the taxes on March 1 of this year. The state's
per-pack tax on cigarettes is $1.50; it charges about 30 cents per gallon of
gasoline.



Courts have ruled that states can impose taxes on sales to non-Indians. The
state could do so by collecting tax payments from cigarette distributors.
Reservation stores would then raise prices, but Native American customers would
be eligible for rebates, legislators said.



But Pataki's Tax Department disregarded the March 1 mandate. Legislators
considered passing a similar mandate this year, attaching it to the state
budget, but in the end decided not to.



Anti-smoking activists have been convinced that Pataki, who is stepping down
at the end of the year, will simply ignore the issue the rest of his term.



When Pataki raised the sales-tax issue in 1997, about 1,000 members of the
Seneca Nation burned tires and shut down Interstate 90 between Hamburg and
Silver Creek south of Buffalo. There was a melee, triggering the arrest of 11
people.



The issue faded away until 2003 when the recession prodded legislators to
pass a law demanding the collection of the taxes. They passed similar laws in

2004 and 2005.



Pataki officials have repeatedly said they want to address the issue through
"cooperation not confrontation."



They have tried to negotiate "parity" deals in which tribes would
voluntarily raise the prices of gas and cigarettes to match what nearby non-Indian
stores charge without paying taxes to the state.



But tentative agreements sometimes included as part of a way to settle
long-standing Indian land-claim lawsuits and open Indian-run casinos -- always
have fallen through.



Contributing: Allissa Kline, O-D




tax-collection TIMELINE
* January 1997: Pataki proposes the state start to collect taxes on sales to
non-Indians.


* April 1997: Seneca Indians protest, shutting down a portion of Interstate
90 in Western New York. No collections were made.


* 2003: Legislators add $164 million to the state budget they expect the
state to receive from the start of tax collections on the reservations and
mandate collections start in 2004. But the state Tax Department never issues the
necessary regulations. Legislature passes another bill mandating the tax
collections start. Pataki vetoes it.


* April 2005: Pataki, lawmakers agree on a budget that calls for the taxes
to be collected starting March 1, 2006.


* January 2006: Pataki proposes pushing the start of the collections to
March 2007.


* February 2006: Top state tax official says collections won't start March 1
so the Legislature can continue to consider Pataki's plan to push the
effective date back to next year.




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Old 05-04-2006, 10:03 AM   #6
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Together We Are Unstopable!!!!

NYA' WE:H blackbear for all this information..... now my bros and sistas.... here is another link that you can support us in our FIGHT for Maintaining our sovereignty ....

http://honorindiantreaties.org

There are several links on this site to show your support....
Please my People... learn about this, support this as we would support you, we can NOT let this issue set a precedence for the government to do this to ALL our NATIONS.... because it will START as a tax on sales (be it gas, cigarettes or beadwork!) and then WHO knows what they will try next....

Nya' we:h
Shantel Burning... PROUD member of the Seneca Nation of Indians...
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Old 05-04-2006, 05:40 PM   #7
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3ndnbear, you do realize that the way this law is written it WILL tax the sale of indian beadwork and crafts as well? It's not just cigarrette, gas, newspapers... it's ANYTHING we sell to non-natives. I'd love to see NY or the US try to tax Canada for what it sells to US citizens.... I know those on Tuscarora are ready to shut down all businesses rather than have an illegal law imposed on them!
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Old 05-04-2006, 06:59 PM   #8
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FROM: THE BUFFALO NEWS NEWSPAPER

_http://www.buffalonews.com/editorial/20060503/1063419.asp_
(http://www.buffalonews.com/editorial...03/1063419.asp)

Suit Asks Levying Of Cigarette Taxes

By TOM PRECIOUS
News Albany Bureau
5/3/2006

ALBANY - The state's convenience stores sued Gov. George E. Pataki and five
tobacco wholesale companies Tuesday in the latest attempt to end tax-free
cigarette sales by Indian merchants.

Amherst-based Yellow Goose markets is among the plaintiffs that say the
governor and wholesalers are intentionally violating a law that went into effect
March 1, requiring the state to collect the taxes.

"If we're going to have these taxes, it ought to be enforced and
administered equally," said James Calvin, president of the New York State Association of
Convenience Stores, the lead plaintiff.

The lawsuit, filed in State Supreme Court in Albany, seeks to force Pataki
and the tax department to collect the state's $1.50 per pack cigarette excise
tax - a levy that lawmakers say would bring the state an extra $400 million a
year in revenue.

In what could bring more immediate results, though, the lawsuit also asks
the court to grant an injunction against the private wholesalers to halt their
tax-free business ties with Indian retailers while the case is being heard.

"We have checked with the tax department and the counsel's office and are
confident that we are doing what we are required to do by the law," Pataki said
of the lawsuit.

He said he prefers to negotiate deals with Indian tribes on the tax issue
rather than have the state force the tax collection. He also dismissed as
overstated claims by lawmakers and others about the revenue windfall the state
could get if the tax were collected.

Would he collect the tax this year, his last in office?

"We're going to do what the tax department believes is the appropriate
procedures," Pataki said.

Tax department officials declined to comment.

Tobacco wholesalers insist they are only following the lead of the Pataki
administration's tax department, which advised cigarette companies that the
agency was not going to enforce the March 1 law - a measure Pataki signed last
year.

"As soon as the governor tells us we can't sell, then we won't sell," said
Frank Attea, president of Milhem Attea & Bros., a Buffalo firm that is a major
tobacco supplier to the Senecas.

The company, along with Frank Colucci Inc., a Niagara Falls company that
also ships tax-free cigarettes to the Indian merchants, were among the five
wholesalers named in the lawsuit by the New York Association of Convenience
Stores, the company that owns the chain of Yellow Goose markets and a central New
York convenience store firm.

Lawmakers for years have tried to push Pataki to collect taxes on both
cigarettes and gasoline sold by Indian retailers.

The governor tried once to collect the tax - in 1997 - but he quickly backed
down following violent protests by Indian merchants and their supporters.

"We're operating day to day. We don't know which way to go," said Colucci,
president of the Niagara Falls wholesale company sued by the convenience stores
for selling untaxed cigarettes to Indians.

He said New York's high level of taxes have created the environment in which
smokers will try to find tax-free cigarettes - an environment that won't
stop, Colucci added, even if the Indians stop the tax-free sales.

"My heart goes out to them," Colucci said of the non-Indian convenience
stores.

But he said his company, begun 101 years ago by his grandfather, had no
choice but to sell to Indian retailers when the state hiked cigarette taxes over
the years. The drop-off in business by non-Indian retailers has been
significant: Colucci said local convenience stores that he once used to ship 500
cartons a week to now buy about ten to 20 cartons.

"If the state of New York tells us not to sell to Native Americans, we will
not sell to Native Americans. It's as simple as that. They could have done
this a long time ago and we would have stopped immediately," Colucci said.

Officials with MWS Enterprises, which operates 41 Yellow Goose stores, did
not return calls for comment.

Court papers said the company had to shut down 14 of its stores located near
Indian reservations "because of a drastic loss of sales to competing
reservation retailers offering cigarettes and motor fuel at greatly reduced prices."


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Old 05-04-2006, 07:01 PM   #9
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FROM: THE CITIZEN ONLINE NEWSPAPER
_http://www.auburnpub.com/articles/2006/05/03/news/local_news/news04.txt_
(http://www.auburnpub.com/articles/20...ews/news04.txt)
Pataki Sued To Enforce Sales Tax
By Staff and wire reports
Wednesday, May 3, 2006 12:32 PM EDT
Convenience store operators on Tuesday sued Gov. George Pataki to compel him
to enforce a new law requiring tax collection on tobacco products and
gasoline sold to Indian businesses.

The New York Association of Convenience Stores says Pataki's failure to
collect taxes on the goods before they reach Indian-owned properties costs
taxpayers $450 million a year and costs businesses $1 billion a year.

NYACS President James Calvin said Pataki is “flouting his constitutional
duties” by not enforcing the law, which took effect March 1. Businesses located
near Indian-owned retailers say they suffer a competitive disadvantage
because they must charge

substantially higher prices.

They've long lobbied without success for the enforcement of state laws
passed to require the Pataki administration to collect sales and excise taxes.

“The law is on the books and has been on the books,” said Case Marshall,
vice president of the Pit Stop convenience store chain with five stores in
Cayuga County and a total of 17 in the region. “It hasn't had any constitutional
challenges. ... He has taken the oath three times to enforce the laws of the
state, but then he refuses to enforce the law he himself signed.”
State tax commissioner Andrew Eristoff earlier this year said that he
wouldn't enforce the law on reservation and Internet sales to non-Indians until
Pataki had more time to settle the long-standing land claims of several tribes.
That delay, however, was rejected by the Legislature.

Pataki has followed a negotiating course since outbreaks of tribal violence
when the state tried to collect taxes in the 1990s.

A study done for the State Health Department last year found that more than
a third of New York smokers regularly avoid the state's high cigarette taxes
by buying from Indian reservations, the Internet or duty-free shops. In 2005,
9.5 billion packs of cigarettes were sold in New York state without being
taxed or stamped.

Pataki, defending his position, said the state was not losing much in the
way of tax dollars because most smokers seeking a tax break order cigarettes
through the mail or the Internet.
“We have checked with the tax department and the counsel's office and we are
confident we are doing what we are required to do by the law,” he said. “I
have always said, from the beginning, that the best way to do this is through
a compact, through consensus, and we are going to continue to strive to do
that.”

State Attorney General Eliot Spitzer earlier this year said his office would
consider filing suits against the wholesalers who sell to the Indian owned
businesses. Those suits are “still under consideration,” spokesman Marc
Violette said.

The NYSACS suit puts Spitzer, who has called for the enforcement of the law,
in the awkward position of defending Pataki's position.

“When it comes to the role of the office, it's very clear,” Violette said. “
We defend the state.”

Marshall, a member of NYACS, said the group sent notices to cigarette and
gasoline distributors to American Indian enterprises that even as the Pataki
administration decided to sidestep the March 1 start date of the tax
enforcement law that they were still breaking the law. They didn't see much effect from
the notices, he said.

A bill introduced in the Legislature would expressly prohibit cigarette
makers from selling cigarettes to wholesalers who knowingly sell untaxed
cigarettes.

“That would work a lot faster than the lawsuit,” said Russell Sciandra of
the Center for a Tobacco Free New York.

The law affects cigarettes and motor fuels sold by the Cayuga Indian Nation,
the Oneida Indian Nation, the Onondaga Nation, the Poospatuck or Unkechauge
Nation, the St. Regis Mohawks, the Seneca Nation, the Shinnecock Tribe, the
Tonawanda Band of Senecas and the Tuscarora Nation.

New York tribes consistently argue tax enforcement violates their
sovereignty.
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Old 05-04-2006, 07:02 PM   #10
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FROM: THE PLATTSBURGH PRESS-REPUBLICAN NEWSPAPER
_http://www.pressrepublican.com/Archive/2006/05_2006/0503200610.htm_
(http://www.pressrepublican.com/Archi...0503200610.htm)
05/03/2006
Convenience Store Reps Sue Pataki
By John Milgrim, Ottaway News Service
ALBANY -- The state's largest convenience store association sued Gov. George
Pataki Tuesday to make him enforce a new state law requiring the collection
of taxes from the sale of cigarettes and gasoline on Indian reservations.
"Governor Pataki's refusal to uphold his constitutional duties to enforce the
law to collect these taxes is hurting taxpayers and small businesses alike,"
said James Calvin, president of the New York Association of Convenience
Stores, the lead plaintiff in the case.
The law took effect March 1 and was enacted by a Legislature increasingly
frustrated by Pataki's refusal to collect sales and excise taxes from
reservation sales to non-Native Americans. Retailers argue that position costs the
state $450 million annually and costs non-reservation retailers more than $1
billion in lost sales because prices on a tribal reservation undercut the
minimum they could charge. The lawsuit also targets wholesalers accused of selling
untaxed tobacco products to retail stores on Indian reservations, including
Tupper Lake's Day Wholesale. A call to that firm seeking comment went
unanswered Tuesday evening.
State and federal courts have long held the state has a right to collect
sales and excise taxes on goods sold to non-Native Americans, but tribes across
New York assert any move by the state to collect would infringe their
sovereignty.
An attempt to collect cigarette
taxes resulted in violence in the 1990s when the tribes moved to protect
their sovereignty.
Brendan White, spokesman for the St. Regis Mohawks, said leaders at their
Akwesasne reservation in western Franklin County have taken a variety of steps
to negotiate with the state. Unlike tribes in central and western New York,
their retailers don't have shops in mass market locations and they don't sell
tobacco products over the Internet.
"The Tribal Council is not surprised by their (the convenience stores)
actions and has always believed the state's concerns can be addressed through
negotiations rather than litigation," White said. "The Tribal Council has stated
several times that Akwesasne is not part of the state's overall tax problem
and enforcement of the state collections will have a negative impact on the
regional economy. Litigating the issue is costly and will impact the ability of
all the parties to reach a negotiated resolution."
A study done for the State Health Department last year found that more than a
third of New York smokers regularly avoid the state's high cigarette taxes
by buying from Indian reservations, the Internet or duty-free shops. In 2005,
9.5 billion packs of cigarettes were sold in New York without being taxed or
stamped.
Pataki, defending his position, said the state was not losing much in the way
of tax dollars because most smokers seeking a tax break order cigarettes
through the mail or the Internet.
"We have checked with the tax department and the counsel's office and we are
confident we are doing what we are required to do by the law," he said. "I
have always said, from the beginning, that the best way to do this is through a
compact, through consensus, and we are going to continue to strive to do
that."
A bill introduced in the Legislature would expressly prohibit cigarette
makers from selling cigarettes to wholesalers who knowingly sell untaxed
cigarettes.
"That would work a lot faster than the lawsuit," said Russell Sciandra of the
Center for a Tobacco Free New York.
The Associated Press contributed to this report.
E-mail John Milgrim at: [email protected]_ (mailto:[email protected])
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Old 05-04-2006, 07:06 PM   #11
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FROM: INDIANZ.COM WEBSITE

_http://64.62.196.98/News/2006/013769.asp_
(http://64.62.196.98/News/2006/013769.asp)

Lawsuit Seeks Showdown Over Reservation Taxes

Wednesday, May 3, 2006

New York's convenience stores filed a lawsuit against outgoing Gov. George
Pataki (R) on Tuesday, seeking to force the collection of taxes on
reservations.
In a 17-page complaint, the New York Association of Convenience Stores
accused Pataki of disregarding a new state law. The group said his failure to
collect taxes on the sale of goods to non-Indians costs taxpayers $450 million a
year.
The lawsuit names several wholesalers who are accused of supplying
cigarettes to reservation retailers without collecting the tax. But the group's main
target appears to be the Indian and tribal businesses themselves, citing a $1
billion loss to non-Indian convenience stores.
"Native American tribes have every right to conduct business, as do their
suppliers, but everyone in the supply chain should be required to play by the
same rules," said James Calvin, the president of the group.
Tribal leaders and Indian entrepreneurs respond that they are indeed playing
by the rules. They argue that treaties that are recognized as law by the
U.S. Constitution protect them from encroachments on their sovereignty by the
state.
Barry E. Snyder Sr., the president of the Seneca Nation, a tribe with a
large number of independent retailers, said Indian businesses contribute to the
state economy. In March, he warned "if the state does not respect our treaties
and our sovereignty, hundreds of Seneca-owned businesses would be forced to
close, putting 1,000 Senecas and non-Senecas out of work."
March 1 was the deadline for the new state law to go into effect. As passed
by the Legislature, it requires the collection of state cigarette and motor
fuel taxes on goods sold to non-Indians. Sales to tribal members are exempt
from the state tax.
But in order to go around sovereignty concerns by requiring the tribal
businesses to collect the taxes, the law seeks to impose the tax on wholesalers
who supply cigarettes and gas to reservations.
Although tribes in several states have entered into compacts to address
taxation, and Pataki has sought to negotiate similar deals, the issue holds
national significance due to a recent U.S. Supreme Court case. In December, the
justices upheld a Kansas state law that imposes a tax fuel sold on the
reservation.
State lawmakers wrote the law with tribes in mind but placed the tax burden
on off-reservation wholesalers who supply gas to reservations. As such, it
"poses no affront to [tribal] sovereignty," Justice Clarence Thomas wrote for
the 7-2 majority.
The ruling bolstered officials in Washington and Oklahoma, two states where
Indian taxation has been an issue. Tribes in Washington are now seeking to
address taxation through negotiation while some tax disputes in Oklahoma have
already landed in court.
The resolution might not be so clear cut in New York. The lawsuit filed by
the convenience stores, as well as the state law, notes that the tax burden
ends up falling on the consumer.
In other cases, state and federal courts have struck down consumer-borne
taxes as an infringement of tribal sovereignty. South Dakota and North Dakota
have been ordered to provide refunds to Indian consumers while tribes in Idaho
are pressing the state refund illegal taxes that were paid.
Although his administration says it is following the state law, Pataki has
cited sovereignty in refusing to collect reservation taxes. The state court
previously ruled that his stance is protected as a policy right.
The political and legal landscape are shifting, however, since Pataki is
leaving office after three terms. The Democratic front-runner, state attorney
general Eliot Spitzer, has said he would force the collection of reservation
taxes if elected.
Relevant Links:
New York Association of Convenience Stores - _http://www.nyacs.org_
(http://64.62.196.98/my.asp?url=http://www.nyacs.org/)
Seneca Nation - _http://www.sni.org_ (http://64.62.196.98/my.a
sp?url=http://www.sni.org/)
Honor Indian Treaties - _http://www.honorindiantreaties.org_
(http://64.62.196.98/my.asp?urlhttp:/...ntreaties.org/)
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Old 05-05-2006, 11:36 AM   #12
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that's right... ANYTHING that is sold to NON natives on the territory WILL be TAXED... that's bs! so our native artist who make a living by selling their traditional talents will have to tax those things... OUTRAGEOUS!!!!!!!
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Old 05-05-2006, 05:13 PM   #13
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straight up it's BS to ask another nation to collect taxes for you... let them set up a duty free or something outside of reservations... You know why they hav'ent enforced this... cause they know it's illegal and they hav'ent got the funds to even possibly or capabley police this.
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