ALBANY, N.Y. -- The New York Association of Convenience Stores (NYACS) has called upon New York state agencies to immediately enforce tax, health and environmental laws on Native American-operated stores that are located neither on a reservation nor on land placed in trust by the U.S. Secretary of the Interior.
The demand arises from the March 29 U.S. Supreme Court ruling in the City of Sherrill case that the Oneida Indian Nation may not buy property in Central New York outside its reservation, unilaterally declare it sovereign Indian land and claim [image-nocss] immunity from local jurisdiction.
"In our view, this means any tribal store not on a reservation or on land placed in federal trust must collect excise and sales taxes on gas and cigarettes, and is also subject to all other state and local regulations they claim to be immune from," said NYACS President James Calvin. He said this would apply to Cayuga Indian Nation-operated stores in Union Springs and Seneca Falls as well as a significant number of Oneida Indian Nation stores in Oneida and Madison counties.
"By hastily applying to get all their nonreservation land placed in trust by the Interior Department, both tribes have tacitly acknowledged that the Sherrill ruling subjects that property to state and local taxes and regulations," said Calvin.
"Under the Sherrill ruling, 'we don't have jurisdiction' is no longer a valid excuse for selective nonenforcement," Calvin wrote in April 5 letters to the state departments of Health, Taxation and Environmental Conservation. "For far too long, our Native American competitors have been exempted from the regulations that licensed, non-Indian retailers are required to strictly adhere to under penalty of law."
NYACS maintains that:The Department of Taxation & Finance should immediately begin collecting excise taxes on sales of motor fuel and tobacco to non-Indian New Yorkers taking place at all Cayuga and other tribal convenience stores, truckstops and smoke shops situated on nonreservation land not in trust and require them to register as sales tax vendors and to collect and remit state and local sales taxes. The Department of Environmental Conservation should immediately require registration and periodic testing of underground petroleum storage tanks at these locations, and make sure they are collecting and redeeming the mandatory nickel deposit on carbonated beverages. The Department of Health should immediately begin conducting undercover compliance checks at these locations to detect and punish any underage sales of tobacco and enforce the statewide ban on self-serve displays of tobacco. The Bureau of Weights & Measures should immediately test the gasoline pumps at these locations to ensure non-Indian consumers that a gallon is a gallon.
If the agencies follow through, it will still leave plenty of Indian stores on reservations that sell cigarettes and motor fuel tax-free to non-Indian New Yorkers. To address that side of the tax-evasion equation, the state legislature adopted a 2005-2006 budget that required the Tax Department to begin collecting taxes on all Indian sales of cigarettes, gasoline and other products to non-Indians.
In a surprise development, Governor George Pataki, who has stubbornly resisted collecting the taxes since 1997, signed the bill April 12, but only after persuading the legislature to pass an amendment changing the effective date from Sept.r 1, 2005, to March 1, 2006, Calvin said.
"We're extremely grateful to the Legislature for making tax fairness a top priority," said Calvin, noting that this was the third year in a row the legislature had passed such a measure; however, he said, "we're holding our applause" for the Governor's approval of the bill until NYACS sees whether he actually follows through with enforcement. He vetoed the measure in 2003 and 2004. The legislature overrode his veto in 2003, ordering the Tax Department to adopt regulations for collecting the taxes, "but due to administrative foot-dragging, two years hence they have yet to implement that law," said Calvin. "So we're understandably skeptical. One would ordinarily think the Executive Branch would faithfully execute laws duly enacted by the Legislature, but on this issue, with this governor, experience shows that's not a safe assumption."
NYACS represents the state's 6,000 neighborhood mini-marts and convenience stores, many of which the association said have suffered severe economic harm from the loss of cigarette and gasoline customers to Native American competitors whose prices are dramatically and artificially lower because they don't include state and local taxes.
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