Council Wants Indian Tribes To Pay State Cigarette Taxes
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The City Council is weighing in on the side of business owners in a dispute over a new state law that requires the collection of taxes from Indian tribes that sell cigarettes.
The chairman of the council’s Finance Committee, David Weprin, said yesterday that he would hold hearings this spring on a resolution calling on the state to enforce the law, which took effect March 1. The state Department of Taxation and Finance said late last week it will not enforce the law, which requires wholesalers to collect taxes up front from Indian businesses that have historically sold cigarettes duty-free.
“I think it’s outrageous that the governor is not enforcing the law,” Mr. Weprin said. A hearing on the resolution, introduced earlier this month, will be held after the council finishes its negotiations over the city budget, he said.
City business owners contend the sale of tax-free cigarettes by Indian tribes fosters a black market. Alleging racketeering, the supermarket chain Gristede’s filed suit against two Long Island tribes on Monday. The issue is pitting Governor Pataki against the state attorney general, Eliot Spitzer, who is running for governor. While a spokesman for Mr. Pataki says the governor prefers to resolve the dispute with Indian tribes “through cooperation instead of confrontation,” Mr. Spitzer has said the law should be enforced. The governor’s spokesman, Kevin Quinn, said yesterday that courts have given enforcement jurisdiction to the Department of Taxation and Finance, not the attorney general. A spokesman for Mr. Spitzer, Marc Violette, declined to comment.
By ignoring the new law and continuing negotiations with the Indian tribes on the issue of cigarette taxes, the state is seeking to avoid a repeat of the massive demonstrations that followed the state’s last attempt to collect taxes from the tribes, in 1997, an administration official, speaking on the condition of anonymity, said yesterday.
The strategy drew criticism yesterday. “I don’t believe it’s appropriate to succumb to that,” the sponsor of the council resolution, Lewis Fidler of Brooklyn, said. “I don’t believe you negotiate the enforcement of a statute when it’s legal and on the books.”
