Senecas to lobby against tax bill

Tribe to make case with governor's office against measure approved by Legislature on tobacco sales

By JAMES M. ODATO, Capitol bureau
First published: Thursday, August 14, 2008

ALBANY -- Seneca Nation of Indian leaders plan to lobby Gov. David Paterson's office today in an effort to block the Legislature's latest attempt to tax sales of tobacco products by American Indian tribes.

The Legislature recently passed a bill aimed at taking away tribal stores' competitive advantage and bringing in an estimated $400 million annually to the state. It would bar manufacturers from selling unstamped -- or untaxed -- cigarettes to any agent who has not provided a certification, under penalty of perjury, that the cigarettes will not be resold untaxed.

For the meeting in the Capitol, the Seneca Nation is sending its attorney general, Robert Odawi Porter, and members of its foreign relations committee, including tribal council President Richard Nephew and J.C. Seneca, operator of Native Pride Smoke Shop, a gasoline station in Irving, Chautauqua County, that also sells tobacco products.

The Albany mission comes after a major meeting between tribal officials and Seneca retailers Wednesday.

"Why do the Indians have to carry the burden of the poor spending habits that happen in Albany?" said Tracie Brown, operator of VIP Gas in Salamanca, Cattaraugus County. She said the tribal politicians have to convince Paterson not to go along with the legislation, which they say will ruin the Seneca economy and hurt western New York.

The Seneca say their tobacco sales top $313 million a year, 60 percent of it from Internet sales and tourists. That money, they say, goes back into the economy off-reservation.

"While millions of unstamped cigarettes flow into New York state every year under the noses of state legislators, especially in New York City, the Seneca Nation stamps all its cigarettes and its vendors collect a fee from customers that supports Nation government programs," Nephew said, adding that 1,000 jobs could be lost under the proposed law.

Paterson won't say if he'll veto the bill, which the Assembly has yet to send to him. "The legislation is currently under review and we're seeking input from interested parties," said Errol Cockfield, a spokesman for the governor.

Lawmakers are seeking the tax collections to help shore up the state's finances. Legislators also say the law is a way to get the state Tax Department to honor tax laws that require collection of sales and excise taxes on sales of tobacco products to non-Indians at Indian stores.

James Calvin, president of the New York Association of Convenience Stores, said the bill passed by the Assembly in June and the Senate last week is "watered down" compared to the original version. As a result, he said, the attorney general and other authorities would not be able to crack down on violators.

The Tax Department, he noted, still hasn't issued coupons to tribal stores that would let Indian customers purchase cigarettes tax free, which was supposed to happen more than two years ago.

"I would like to see more teeth in the legislation," Calvin said. "It relies on the Tax Department to take an affirmative step to do something, to create a form for wholesale distributors to use to show they do not sell untaxed cigarettes to the tribe."

The Tax Department has been holding off on enforcement because of gubernatorial directives to disregard enforcement pending negotiations with the tribes.

James M. Odato can be reached at 454-5083 or by e-mail at This email address is being protected from spam bots, you need Javascript enabled to view it

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