We previously noted New York City’s “roll your own tobacco shops” which were not much more than a blatant attempt to get around cigarette taxes. (I thought I linked to this at the time, but I can’t find the link now; the shops reached a settlement with the city and closed down, last I heard.)
Well, now the Indian tribes have gotten into the act. You see, the tribes used to buy smokes wholesale from distributors and resell them, tax free. But the state of New York went to court, and got a ruling that requires the wholesalers to collect taxes.
Now the Indian tribes are making their own brands of cigarettes.
The tribes argue that because they are sovereign nations, the cigarettes they make are exempt from the state’s $4.35-a-pack excise tax, the highest in the United States. But the tobacco industry and owners of other convenience stores say tribal cigarette manufacturing is just an elaborate form of tax evasion.
And there’s rent seeking:
The New York Association of Convenience Stores, which had urged Mr. Cuomo to collect taxes on name-brand cigarettes sold by tribes, is now pushing the governor to target Indian brands. “There remains an enormous tax-evasion problem to be addressed,” James Calvin, the association’s executive director, said.
David Sutton, a spokesman for Altria, the parent company of the country’s largest cigarette maker, Philip Morris, said, “All cigarettes sold to non-Native American New Yorkers need to be tax-paid — regardless of who manufactures them — or New York State will continue to lose legitimate and significant tax revenue, and law-abiding retailers will continue to be impacted by cigarette tax evasion.”
This entry was posted on Thursday, February 23rd, 2012 at 1:28 pm and is filed under Clippings, Law. You can follow any responses to this entry through the RSS 2.0 feed.
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