ALBANY -- Come Wednesday, state government will be breaking the law and begin costing taxpayers millions of dollars by choosing not to enforce legislation that would end the huge sales advantage that Indian tribes have over taxpaying competitors off reservations, said Attorney General Eliot Spitzer.
"The current tax laws are being ignored," said Spitzer, the state's lawyer. "The new law goes into effect automatically on March 1 ... regardless of what the tax department does."
The state Department of Taxation and Finance said it won't enforce the new law requiring Indian tribes to pay the state's rising cigarette taxes for sales to non-Indians through its massive Internet site and at reservation stores. Instead, Commissioner Andrew Eristoff said he'll wait to see if the Legislature agrees with Gov. George Pataki to again delay enforcement by a year -- a delay the Democrat-led Assembly already rejects.
Nonetheless, officials on all sides figure nothing will happen Wednesday. And for some who fear a reprise of 1990s violence by Indians the last time the state tried to collect taxes, that's just as well.
As written, the law this time is aimed not at the tribes -- whose leaders say they are shielded from collecting state taxes as sovereign nations -- but at the large commercial tax and stamping agents licensed by the state.
The wholesalers are compelled by the law to stop selling untaxed, unstamped cigarettes to tribes. The Pataki administration's role under the law is to provide coupons, already printed up, that would allow Indians to avoid taxes on the cigarettes they buy for their own personal use.
The Pataki administration refused to say what, if anything, it has told the wholesalers to do as of Wednesday. Tax Department spokesman Tom Bergen said Tuesday he didn't know if the cigarette wholesalers will adhere to the law and stop providing untaxed, unstamped cigarettes to tribes -- the biggest Indian customer being the Senecas in western New York.
Normally, the state Taxation and Finance Department would take action against those lucrative licenses if a wholesaler failed to follow state law.
The next tier of action after Wednesday could be lawsuits, by non-Indian retailers against the state or by the state Attorney General's Office against wholesalers, but either courses would be lengthy.
"The tax stamping agents are required to comply with the law" when it takes effect automatically Wednesday, said Spitzer, who is the front-runner in the governor's race. "If they don't, then the tax department should initiate proceedings to pull their stamping licenses."
A major tax stamp company, Harold Levinson Associates of Farmingdale, didn't respond to a request for comment on what the company will do. Seneca spokeswoman Susan L. Asquith said the tribe feels the law doesn't begin Wednesday and doesn't know what wholesalers will do.
"We do not expect to begin enforcement on March 1," Eristoff stated in testimony before the Legislature at a Feb. 15 budget hearing. "As a matter of practical administration, we think it would be premature to begin implementing at the same time that the Legislature is reviewing substantive amendments to the law."
But the Legislature apparently isn't.
"No one is considering it seriously," said Assemblyman Alexander "Pete" Grannis, a New York City Democrat and the chamber's leader on the issue. "March 1, they are violating the law," he said of the Pataki administration.
"We believe this new approach is a workable, legal, nonintrusive approach as it relates to the sovereignty of the Indian Nations," Grannis said.
The state Department of Taxation and Finance said it won't enforce the new law requiring Indian tribes to pay the state's rising cigarette taxes for sales to non-Indians through its massive Internet site and at reservation stores. Instead, Commissioner Andrew Eristoff said he'll wait to see if the Legislature agrees with Gov. George Pataki to again delay enforcement by a year -- a delay the Democrat-led Assembly already rejects.
Nonetheless, officials on all sides figure nothing will happen Wednesday. And for some who fear a reprise of 1990s violence by Indians the last time the state tried to collect taxes, that's just as well.
As written, the law this time is aimed not at the tribes -- whose leaders say they are shielded from collecting state taxes as sovereign nations -- but at the large commercial tax and stamping agents licensed by the state.
The wholesalers are compelled by the law to stop selling untaxed, unstamped cigarettes to tribes. The Pataki administration's role under the law is to provide coupons, already printed up, that would allow Indians to avoid taxes on the cigarettes they buy for their own personal use.
The Pataki administration refused to say what, if anything, it has told the wholesalers to do as of Wednesday. Tax Department spokesman Tom Bergen said Tuesday he didn't know if the cigarette wholesalers will adhere to the law and stop providing untaxed, unstamped cigarettes to tribes -- the biggest Indian customer being the Senecas in western New York.
Normally, the state Taxation and Finance Department would take action against those lucrative licenses if a wholesaler failed to follow state law.
The next tier of action after Wednesday could be lawsuits, by non-Indian retailers against the state or by the state Attorney General's Office against wholesalers, but either courses would be lengthy.
"The tax stamping agents are required to comply with the law" when it takes effect automatically Wednesday, said Spitzer, who is the front-runner in the governor's race. "If they don't, then the tax department should initiate proceedings to pull their stamping licenses."
A major tax stamp company, Harold Levinson Associates of Farmingdale, didn't respond to a request for comment on what the company will do. Seneca spokeswoman Susan L. Asquith said the tribe feels the law doesn't begin Wednesday and doesn't know what wholesalers will do.
"We do not expect to begin enforcement on March 1," Eristoff stated in testimony before the Legislature at a Feb. 15 budget hearing. "As a matter of practical administration, we think it would be premature to begin implementing at the same time that the Legislature is reviewing substantive amendments to the law."
But the Legislature apparently isn't.
"No one is considering it seriously," said Assemblyman Alexander "Pete" Grannis, a New York City Democrat and the chamber's leader on the issue. "March 1, they are violating the law," he said of the Pataki administration.
"We believe this new approach is a workable, legal, nonintrusive approach as it relates to the sovereignty of the Indian Nations," Grannis said.
