NYACS Says No on Oneida Indian Tax Settlement

Lopsided deal would codify gas, tobacco price advantages, regulatory immunity for tribal stores

ALBANY, N.Y. -- The tax portion of the proposed casino, land claim and taxation agreement among the Oneida Indian Nation (OIN), the state of New York and Madison and Oneida counties is too "limited, imprecise and lopsided" to restore the level playing field that non-Indian retailers have been denied for the past two decades, the New York Association of Convenience Stores (NYACS) has concluded.

"Rather than ending unfair competition, it appears to codify permanent price differentials that would enable tribal enterprises to forever under-price tobacco and gas to the detriment of competing non-Indian convenience stores--with the eternal blessing of the state and the counties," said NYACS President James Calvin.

"We applaud Governor Cuomo for making it a priority to address this issue, and thank him for consulting us along the way," said Calvin. "However, we view this settlement as too limited, imprecise, and lopsided to be fair to licensed, tax-collecting retailers whose livelihoods have been steadily eroded by cigarette and motor fuel tax avoidance driven by New York State tax policy and facilitated by the Oneida Indian Nation's retail enterprises."

NYACS is urging the state legislature to disapprove the "Resolution of Tax Disputes" portion (Section V) of the proposed Oneida Indian Nation agreement until such time as it is modified in order to achieve the true fairness and balance that all affected parties deserve. The governor has asked the legislature to ratify the entire OIN agreement this month as part of a broader casino gambling bill.

"Achieving equality has been a major theme of the last two legislative sessions in Albany," said Calvin. "The proposed Oneida Indian tax settlement doesn't square with that mantra. Under its terms, New York would forever be more open for business for some than for others. That's not parity."

NYACS' analysis indicates the agreement would:

  • Allow the Oneidas to resume receiving untaxed deliveries of national-brand cigarettes, circumventing the supply channels prescribed by State law.
  • Allow OIN stores to resume selling under-priced Marlboro, Newport, and other national-brand cigarettes, a practice that was appropriately halted by the state two years ago.
  • Permit the Oneidas to import untaxed Indian-made cigarettes from other reservations, lifting the existing state ban on such shipments.
  • Permanently grant the Oneidas substantial price advantages over non-Indian competitors on cigarettes, other tobacco products and motor fuel.
  • Beyond these price advantages, bestow upon OIN enterprises a gross retail profit of $50 a carton for cigarettes (eight times that of most surrounding non-Indian retailers) and up to 45 cents a gallon for gasoline (three to four times that of most surrounding non-Indian retailers).
  • Permit OIN retail shops to ignore duly enacted state regulations governing the sale of tobacco and motor fuel that their non-Indian competitors are forced to comply with--and immunize them from any additional tobacco or motor fuel regulations the state may enact in the future.
  • Allow the Oneidas to expand their tobacco and motor fuel retailing activity by opening additional stores throughout Madison and Oneida counties offering the same permanent price advantages and immunity from state and local regulation as their existing locations.
  • Allow the Oneidas to continue selling a wide assortment of other consumer products--beverages, candy, snacks, frozen foods, automotive supplies, etc.--without charging the equivalent of state and local sales taxes, condemning non-Indian retailers to a permanent price disadvantage of 8% to 8.75% on those items.
  • Expose non-Indian retailers in other regions of New York State to these same price disadvantages and regulatory double standards should terms of this agreement be replicated in settlements with other New York tribes that currently sell tobacco and/or motor fuel to non-Indians tax-free in defiance of State law.

See File Attachments below for a detailed analysis of the tax settlement.

NYACS is a private, not-for-profit trade organization representing the interests of 8,000 licensed mini-marts and convenience stores across New York State that collect and remit all applicable state and local taxes on the products they sell, and comply with all applicable state and local regulations.