ALBANY, N.Y. -- The Enforce the Law, Collect the Tax Coalition applauded the Cuomo Administration's announcement that it has begun shutting down the unstamped, untaxed reservation cigarette trade, and it urged the Administration to promptly collect taxes on all brands, including Native American manufactured products.
Governor Andrew M. Cuomo late last week directed Lieutenant Governor Robert J. Duffy, director of state operations Howard Glaser and New York State Department of Taxation & Finance commissioner Thomas H. Mattox to update New Yorkers on the Administration's [image-nocss] efforts to enforce the state's cigarette tax.
As a result of efforts by the New York State Department of Taxation & Finance, State Police and federal Bureau of Alcohol, Tobacco, Firearms & Explosives, in the past three weeks, the state of New York has conducted 357 retail inspections, increased cigarette tax stamps 14% from May to June, seized 19,744 cartons of cigarettes, seized 24,882 cigars and seized 33.75 pounds of tobacco.
Jim Calvin, president of the New York Association of Convenience Stores (NYACS), said, "We're pleased with the Administration's continued commitment to full and fair enforcement of the law. All cigarettes sold to New Yorkers need to be tax-paid--regardless of who manufactures them--or else our state will continue to lose billions in legitimate tax revenue and law-abiding retailers will continue to lose jobs and customers to the cigarette tax evasion epidemic."
The estimated tax value of property seized is approximately $1.2 million. If the cigarettes were sold in New York City, approximately $289,000 in additional taxes would have been evaded. New York collects approximately $1.7 billion in total cigarette and tobacco taxes and the new enforcement efforts are expected to raise an additional $27 million in tax revenue.
"It has been our consistent position that cigarettes should be taxed under the law and the courts have repeatedly agreed," Cuomo said. "The law is the law, and we will enforce it. Everyone must pay their fair share, and that includes those who sell cigarettes."
The Department of Taxation & Finance and the Division of State Police signed a Memorandum of Understanding to ensure continued close coordination between the State Police and Tax Department investigators in enforcing cigarette tax statutes and seizing cigarettes being brought to market without taxes paid.
The enforcement initiative includes inspecting stamping agent facilities to verify inventories and insure compliance with state law, gathering information as to who is delivering and picking up untaxed cigarettes, inspecting stamping agents' delivery vehicles to insure that they are only transporting stamped product, stopping certain vehicles when there is probable cause to believe that they are being used to transport untaxed product in violation of state law and working to develop information on the movement of large shipments of untaxed product.
In the aftermath of federal and state court decisions upholding the state's power to collect these taxes, some tribal sellers have argued that they will continue to sell untaxed and unstamped Native American manufactured products to New Yorkers. The Administration noted in its press conference, however, that the law allows the state to collect taxes on Native American manufactured cigarettes no less so than other brands sold to non-tribal purchasers.
"Allowing some manufacturers to evade the state's highest-in-the-nation excise tax of $4.35 per pack would simply replace one loophole with another, perpetuating the sale of illegal cigarettes all over the state, including on street corners and other locations where the laws just aren't being enforced," added Calvin. "That's not good for New York, it's not good for honest retailers who play by the rules, and it isn't good for the men and women in law enforcement who are confronted by a massive cigarette contraband problem."
Seneca Nation president Robert Odawi Porter responded in a statement: "As always, our status as a sovereign nation prevents, by federal treaty, enforcement of state taxes on our territorial commerce. We will never take any action to collect state taxes or allow the state to do so on our territory. That is not something that's open for discussion."
"As far as trying to tax tobacco brands manufactured on Nation territory, they are already subject to federal regulation, as well as our own Nation rules. These businesses have the same rights to make and sell cigarettes as anyone else in the United States. Secondly, courts have never addressed the state's authority to tax federally regulated native brands. Nothing in current court decisions grants the state taxing authority over these products."
"Finally, the Seneca Nation wants to reiterate that tobacco taxes are not an 'Indian problem.' The problem is created by New York's excessive taxing of tobacco products and its open borders."
"The Nation always stands ready to discuss with the state any efforts to improve the quality of life and economic well-being of New Yorkers."
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