Tobacco

NYACS Praises New Tax Fairness Legislation

Bill to bar cigarette makers from supplying distributors selling untaxed smokes to Native American outlets goes to gov

ALBANY, N.Y. -- The New York Association of Convenience Stores (NYACS) is cheering the state legislature's passage of a bill that would bar cigarette manufacturers from supplying any wholesale distributor known to be illegally selling untaxed cigarettes to Native American outlets.

Having passed the state Assembly June 6, the bill won final legislative approval Tuesday, June 20, when it passed the Senate, NYACS said. The bill is expected to be delivered to Governor George Pataki in a matter of days. He will have 10 days from that point to either sign [image-nocss] it or veto it.

NYACS President James Calvin said Pataki's record on the tax fairness issue strongly suggests that he will veto it, in which case it could only be enacted into law by an override, requiring a two-thirds majority vote by both houses of the Legislature. If the Legislature did override the veto, the law would take effect immediately. It would go a long way toward relieving New York's cigarette tax evasion epidemic, said Calvin.

The bill says a cigarette manufacturer could not sell unstamped or unlawfully stamped packages of cigarettes to any wholesale dealer or agent if the manufacturer has been officially notified by the state attorney general, state tax department, or city of New York that the distributor has sold untaxed packages of cigarettes (no excise tax stamp applied) in violation of a new section of the state tax law that took effect March 1, 2006. That section required the Tax Department to begin collecting taxes on sales of cigarettes and motor fuel by Indian retailers to non-Native American customers and prohibited distributors from supplying retailers with unstamped cigarettes unless the tribe presented them with Tax Department-issued tax-exempt coupons. But the department is refusing to collect the taxes or to implement the coupon system.

NYACS, therefore, is suing Pataki, the Tax Department and the distributors that have continued to sell untaxed product to tribal retailers. The initial court appearance in the case is June 30 in New York State Supreme Court in Albany, said the group.

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