Spitzer urged to collect cigarette tax from Indians

By The Associated Press

Thursday, March 22, 2007 11:56 AM EDT

BUFFALO - Dr. Michael Cummings wouldn't mind seeing a $10-per-pack tax on cigarettes - enough, he says, to defray the medical costs of the damage they cause.
That wouldn't be great for business at the convenience stores Jim Calvin represents.

But when the two stood side by side Wednesday, it was on common ground. Both urged Gov. Eliot Spitzer to stick to his plans to collect sales tax on cigarettes sold by Indian businesses in New York to non-Indian customers.

The unlikely alliance was the latest public airing in the crescendoing debate over tax collection that Spitzer, who took office in January, has vowed to settle.

Although his administration has yet to decide on a tax-collection plan, a spokeswoman indicated this week that the state was open to a proposal that would provide for collection of the tax while sharing the revenue with tribes. The measure would end tribes' price advantage over non-Indian retailers obligated to collect the state's $1.50 per pack tax.

The New York Association of Convenience Stores, led by Calvin, has long complained that the group's 7,000 stores are unable to compete with tribal competitors' reduced-price cigarettes and that state and local governments have lost hundreds of millions of dollars in revenue.

Cummings said the losses from a public health perspective may be even greater. The availability of reduced-price cigarettes encourages smoking, he said, raising the incidence of cancer and heart disease. The public cost of treating smoking-related illnesses amounts to $1,000 per year for every household in the state, he said.

“We've created a situation where we're making smoking more affordable than it should be,” said Cummings, who spoke with Calvin at the office of Erie County Executive Joel Giambra, a former smoker who survived throat cancer.

Last week, members of the Seneca Indian Nation - the leaders of reservation cigarette sales - gathered in much larger numbers to try to sway Spitzer in the other direction. About 500 members traveled from their Allegany and Cattaraugus reservations in western New York for a show of force outside Buffalo City Hall.

“We would like to make a statement to the newly elected governor of New York state, Eliot Spitzer,” Seneca President Maurice John announced. “We will not become tax collectors for New York state.”

The Senecas contend federal treaties dating to the 1700s shield the nation from state taxation. The state's attempts to collect tax a decade ago resulted in violent clashes between Senecas and state police.

Tribal leaders said their smoke shops and gas stations support hundreds of jobs held by Senecas and non-Senecas.

Calvin said the contribution is appreciated, “but being an economic force does not excuse any entity from abiding by duly enacted standards for conducting commerce with New Yorkers, and that includes taxation.”

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