Press-Republican

June 14, 2011

Mohawks to snub tax collection

DENISE A. RAYMO
Press-Republican

AKWESASNE — Cigarette-tax collection on Indian reservations in New York is on hold again, but Akwesasne leaders say they will not participate in either enforcement option offered in the law.

A Supreme Court ruling handed up last Wednesday lifted a temporary court order that had prevented the state from collecting a $4.35-per-pack tax on cigarettes sold on reservations in New York, including Akwesasne.

But the Seneca Indian Nation was granted an injunction late Thursday by the Appellate Division of State Supreme Court to hold off all tax collection on reservations until June 20.

Repeated calls to the St. Regis Mohawk Tribal Council were not returned, and officials with the Genienkeh Territory near Altona could not be reached.

Under the law, the additional per-pack tax would be collected by wholesalers at the front end of cigarette-buying transactions, and they would, in turn, pass the increase on to reservation retailers.

The price that customers would pay for national-brand cigarettes would go from $27 a carton to roughly $70.50 and locally manufactured smokes would go from about $13 per carton to $56.50.

About 700,000 cartons are sold on the Akwesasne reservation each year, and the state anticipates bringing in $200 million to $1 billion a year from the sales-tax collection on New York reservations.

CARTON ISSUING

But leaders of the St. Regis Mohawk Tribal Council recently told residents at a community meeting attended by the Indian Time newspaper they will not participate in either collection options contained in the state law.

One plan calls for wholesalers to issue a fixed number of cartons to the territory and disburse them on a first-come, first-served basis to the retailers, the article states.

The smokes would be tracked and paid for quarterly.

Some Akwesasne store owners fear one business could monopolize the shipments as long as they had the cash on hand to afford it, leaving others without popular national-brand products to sell, the newspaper states.

Losing that portion of the lucrative cigarette trade could force some stores out of business.

VOUCHERS

The other alternative is that Akwesasne retailers would issue vouchers to their Indian customers, who are exempt from paying all state and federal taxes.

Those customers would send their coupon in to the state for reimbursement of the state tax.

Akwesasne store owners say the 119,000 vouchers per quarter allotted to Akwesasne may not be enough for the demand and that they, as tribal retailers, do not want to be tax-collecting agents for the state against their own people.

"Regardless of which system we are talking about, neither is satisfactory," Tribal Chief Mark Garrow said in the Indian Time article.

If the tribe does not choose an option from the two, the law states that its retailers will automatically be set up on the coupon-allotment system.

Retailers at Akwesasne have said that if the state-tax collection is implemented, they would no longer sell national-brand cigarettes.

Email Denise A. Raymo at: draymo@pressrepublican.com