When New York State Gov. David A. Paterson decided to try to force Native American tribes to pay the state sales tax on cigarettes, he should have known he was getting himself into a tenuous situation.
Tribal organizations and business owners have long thrived due to not charging taxes on cigarette sales to both natives and non-natives. New Yorkers who smoke have also benefited greatly from purchasing cigarettes at extremely reduced prices when they make the trip to the various Indian reservations across the state.
Meanwhile, New York State, already engulfed in an enormous budget crisis, is losing out on hundreds of millions in potential tax dollars.
We feel that the state has the right to collect the money.
By the letter of the law, Paterson is absolutely within his rights to force the Native American tribes to pay the taxes. Tribal businesses are only supposed to be tax-exempt from sales that take place between Native Americans. Therefore, all cigarette sales to other New Yorkers should be taxed.
Paterson is trying to tax the cigarettes at the wholesale level, eliminating the need to investigate individual stores on tribal land. Tobacco manufactured on the Native American reservations would remain untaxed.
It is not that simple, however. Native American tribes, which enjoy special rights as separate entities, have a history of not reacting well to government attempts to regulate their activity, especially when it comes to state taxes. Threats of protest and violence have been made. One such threat includes blocking the New York State Thruway where it passes though the reservations.
What tribal leaders must remember is that they benefit from many services provided by the state. Native Americans living on reservations benefit from public education, welfare, police protection and public infrastructure, which are all funded by the same state taxes that they are now refusing to pay.
Additionally, business owners located in proximity to Native American reservations are suffering because they cannot compete with the low prices that the tribes can offer.
Paterson would be wise to negotiate with tribal leaders rather than slamming his fist down and not budging from his position. A state appellate court judge has already brought his initiative to a temporary halt and the Native Americans are prepared to make a case in court anchored by history, pride and emotion.
Perhaps Paterson can enforce a lower tax on the tribal cigarettes. It still wouldn't be equal with the rest of the state, but the state needs any money that it can get, and something is better than nothing.
Whatever ends up happening, we hope that the two sides can negotiate peacefully and come to an understanding about the role of Native Americans in New York State today. The government must realize the sensitivity of the situation; a result of the history of the Native Americans, and the Native Americans must acknowledge that though they are separate in many ways, they can't (and shouldn't) be fully isolated from the community around them.
