Posted on February 2, 2011 at 5:43 pm by Rick Karlin, Capitol bureau in General, Indian Taxation
This has come up before, but Cuomo’s budget plan assumes that the state will get $130 million from, finally, taxing cigarette sales on Indian reservations to non-Indians.
From the budget’s revenue projections: 2011-12 Projections All Funds receipts are projected to be $1,786 million, an increase of $165 million, or 10.2 percent above 2010-11. This increase reflects the full year impact of the legislation enacted in 2010-11, including $130 million in cigarette tax revenue from the implementation of laws requiring the collection of tax on cigarettes sold on Indian reservations to non-Native Americans.
News of the planned taxes was greeted warmly by an organization that has been pushing for that, the Enforce the Law, Collect the Tax Coalition “The Enforce the Law Collect the Tax Coalition applauds Governor Cuomo for projecting real and significant increases in cigarette tax revenue in his 2011-2012 Executive budget. By projecting excise tax collections from the implementation of laws requiring the collection of tax on cigarettes sold on Indian reservations to non-Native Americans, the Governor’s Executive budget proposal is yet another clear indication of the administration’s commitment to rectifying this long standing inequity. We remain confident that the courts will soon conclude that the state is correct on these issues and will clear the way to collect these much needed revenues.”
A reality check may be in order here, since the Indian tobacco tax has been on the books, unenforced, for years and it was supposed to happen last year as the current budget was being finalized as well.
21 Comments
1. MomOfThree
February 2, 2011, 7:18 PM
I thought that every Indian nation had its own separate laws and therefore are not subject to outside laws. So how can Cuomo even bring this up?
2. joe_from_france
February 2, 2011, 7:49 PM
Including revenues from cigarette sales on Indian reservations to non-Indians shouldn’t that be considered another Budget “sham” Mr. Megna?
3. Smith
February 2, 2011, 8:06 PM
Perhaps the Governor is going to finally get our money’s worth from the $100,000 per year Troopers by using them to enforce the tax collection.
4. ezpickinz
February 2, 2011, 8:35 PM
These native Americans are not going to pay NYS one single cent of tax money. They would rather owe NYS than screw us out of that tax money. I think that NYS should stop maintaining the State highways that pass through the reservations and lead to their casinos. Not too long ago, the Seneca Nation wanted to charge a buck a car for each vehicle passing through their reservation along the NYS Thruway. OK; but payback is a bitch, ain’t it?
5. thelawisclear
February 2, 2011, 9:13 PM
MomofThree, courts have said a number of times that the state would not be taxing native americans. The state would be taxing native american sales to non-native americans. Their laws/treaties have nothing to do with it. This absolutely is an issue of enforcement and each of the last three governors have basically not even tried, even though they all count the revenue.
Talk about a scam.
6. Parma Ham
February 2, 2011, 10:26 PM
Smith, good point about the troopers, how about starting them at $45k and letting them up to $60k after 10 years. i bet you’d get no shortage of quality applicants
7. Lwoodbluz
February 3, 2011, 3:37 AM
What the state really needs to do is set up checkpoints right outside the reservations to collect duties(taxes) from people leaving the Nation. Just a simple “Do you have anything to declare?” and a search if necessary should bring in the revenue.
And don’t worry about the Native Americans closing off the Thruway like they did in 1997. They want thier casino money, they won’t close thier lifeline to all that revenue.
8. ResidentX
February 3, 2011, 5:54 AM
its really not a big problem… if the taxes arent collected we can just layoff more state workers. I mean, thats what they are there for… right?
9. Walt
February 3, 2011, 7:20 AM
The state will lose on this as well as all the other bullying tactics they are attempting!
10. UnCivilServant
February 3, 2011, 7:41 AM
What I don’t get is why we continue this farce. The residents of these “nations” have Us Citizenship and the right to vote in US elections, and thus should be subject to all taxes imposed on the rest of us. We should stop pretending that they aren’t part of this country. The annexation was complete almost a century ago, sweep away the last vestages of deceit and bring our fellow citizens into the fold.
11. WHAT A JOKE
February 3, 2011, 8:02 AM
The tribes want New York services? The Tribes should then pay New York taxes. What’s complicated here? The Tribes can’t have it both ways.
12. Albany Resident
February 3, 2011, 8:50 AM
How about we cut the $130,000,000.00 out of the budget. If the blood-suckers at the capital don’t have it, maybe, just maybe, Cuomo won’t let them spend it. But thats probably as much a pipe dream as collecting the tax is in the first place. However I do like Lwoodbluz take on it. We have checkpoints at the entrances/exits to our other “Nation” neighbors, they want soveriegnty then treat them like it!
13. K2
February 3, 2011, 9:28 AM
@ mom of three, if they are a sovereign nation why do they receive state and federal funds.
They can accept our tax dollars but can’t collect taxes on non-natives? It is one or the other not both.
14. From Western New York
February 3, 2011, 10:41 AM
The new tax revenues will NOT be achieved. First off, there is the whole issue of elasticity. People will buy fewer cigarettes. Second there is whole substitution issue. People will seek other, cheap sources. Finally, part of the tax revenue will need to be diverted to pay for unemployment, welfare, WIC, etc. as New York Jobs are killed by the Governor.
15. Robin Hackett
February 3, 2011, 11:02 AM
@From Western New York…you’re right. I already buy my ciggarettes in the states I travel through. I haven’t bought a pack in NY since Patterson’s last luxury tax increase.
16. jimbo
February 3, 2011, 12:55 PM
If the Tribes have to tax non-residents, their cigarette sales will drop like a rock anyway, so the revenue the budget is projecting in new taxes is just an excuse to spend more money they won’t have.
The border patrol checkpoints on the tribal territory boundaries is an interesting idea. I wonder how many state workers they would have to hire to man those stations? They could easily suck up all that extra revenue and create new state worker jobs at the same time. The additional funds would never make it out of the administrative funds necessary to implement it, the unions would look good and a few western state lawmakers would look good come next election……
17. WNYTaxpayer
February 3, 2011, 1:10 PM
All DTF has to do is to subpoena the Merchant Account Processors for the Indian retailors and compare the list of who made purchases with visa, mastercrad, etc. that did not report it on their state income taxes and issue notice of deficiencies to them.
18. can't uc
February 3, 2011, 3:16 PM
If the plan is imposed on the natives to collect taxes on sales to non-natives , it will only create a huge black market making more natives very wealthy.
19. pragmatic
February 3, 2011, 7:26 PM
It is time for Andy to stand up and shut down the indian casinos. Spitzer had the chance but lacked the courage. Lets see if Andy has the guts to stand up to this special interest group
20. John Kane
February 4, 2011, 10:10 AM
We should be clear that the state knows this new law will not generate revenue from Native sales. The intent of the law is to shut off supply to Native retailers of unstamped product. If Native retailers lose their regulatory advantage, Native sales will end. The question is will those sales be made elsewhere and where? The numbers that are being used in this budget are a sham. They are based on past sales and assume that as Native sales are lost that a significant portion of them will become taxed sales. Over the past year Native sales in Western New York have fallen by 80% due to shutting down the US Post Office from delivering remote sales of tobacco. Even without Native sales, the state loses far more than $130 million in revenue leakage to out-of-state sales; this would obviously increase with the loss of Native sales, which by the way still contribute to the NYS economy. Of couse a fair amount of people will just not be able to afford to smoke and while that maybe a good thing from a health standpoint, it certainly does nothing for the state’s budget. The other thing, only lightly touched on by other comments is the price of enforcement. The last time the state did battle with the Indians it cost $23 million per month and that was before troopers were making $100,000 per year. The final point overlooked is the resiliency of Native retailers. They will still find product to sell, with or without New York State wholesalers.
21. John Kane
February 4, 2011, 10:19 AM
Another point that the media refuses to point out is that the state allows everyone in the state to purchase and consume in the state cigarettes without NYS tax applied up to two cartons per consumer. NYS Form CG-15 for Cigarette Use Tax clearly lays out the exemption (http://www.tax.state.ny.us/pdf/2010/altab/cg15i_710.pdf). Apparently, the state’s position is that these untaxed sales can be made anywhere outside New York's jurisdiction except on Native lands.
This has come up before, but Cuomo’s budget plan assumes that the state will get $130 million from, finally, taxing cigarette sales on Indian reservations to non-Indians.
From the budget’s revenue projections: 2011-12 Projections All Funds receipts are projected to be $1,786 million, an increase of $165 million, or 10.2 percent above 2010-11. This increase reflects the full year impact of the legislation enacted in 2010-11, including $130 million in cigarette tax revenue from the implementation of laws requiring the collection of tax on cigarettes sold on Indian reservations to non-Native Americans.
News of the planned taxes was greeted warmly by an organization that has been pushing for that, the Enforce the Law, Collect the Tax Coalition “The Enforce the Law Collect the Tax Coalition applauds Governor Cuomo for projecting real and significant increases in cigarette tax revenue in his 2011-2012 Executive budget. By projecting excise tax collections from the implementation of laws requiring the collection of tax on cigarettes sold on Indian reservations to non-Native Americans, the Governor’s Executive budget proposal is yet another clear indication of the administration’s commitment to rectifying this long standing inequity. We remain confident that the courts will soon conclude that the state is correct on these issues and will clear the way to collect these much needed revenues.”
A reality check may be in order here, since the Indian tobacco tax has been on the books, unenforced, for years and it was supposed to happen last year as the current budget was being finalized as well.
21 Comments
1. MomOfThree
February 2, 2011, 7:18 PM
I thought that every Indian nation had its own separate laws and therefore are not subject to outside laws. So how can Cuomo even bring this up?
2. joe_from_france
February 2, 2011, 7:49 PM
Including revenues from cigarette sales on Indian reservations to non-Indians shouldn’t that be considered another Budget “sham” Mr. Megna?
3. Smith
February 2, 2011, 8:06 PM
Perhaps the Governor is going to finally get our money’s worth from the $100,000 per year Troopers by using them to enforce the tax collection.
4. ezpickinz
February 2, 2011, 8:35 PM
These native Americans are not going to pay NYS one single cent of tax money. They would rather owe NYS than screw us out of that tax money. I think that NYS should stop maintaining the State highways that pass through the reservations and lead to their casinos. Not too long ago, the Seneca Nation wanted to charge a buck a car for each vehicle passing through their reservation along the NYS Thruway. OK; but payback is a bitch, ain’t it?
5. thelawisclear
February 2, 2011, 9:13 PM
MomofThree, courts have said a number of times that the state would not be taxing native americans. The state would be taxing native american sales to non-native americans. Their laws/treaties have nothing to do with it. This absolutely is an issue of enforcement and each of the last three governors have basically not even tried, even though they all count the revenue.
Talk about a scam.
6. Parma Ham
February 2, 2011, 10:26 PM
Smith, good point about the troopers, how about starting them at $45k and letting them up to $60k after 10 years. i bet you’d get no shortage of quality applicants
7. Lwoodbluz
February 3, 2011, 3:37 AM
What the state really needs to do is set up checkpoints right outside the reservations to collect duties(taxes) from people leaving the Nation. Just a simple “Do you have anything to declare?” and a search if necessary should bring in the revenue.
And don’t worry about the Native Americans closing off the Thruway like they did in 1997. They want thier casino money, they won’t close thier lifeline to all that revenue.
8. ResidentX
February 3, 2011, 5:54 AM
its really not a big problem… if the taxes arent collected we can just layoff more state workers. I mean, thats what they are there for… right?
9. Walt
February 3, 2011, 7:20 AM
The state will lose on this as well as all the other bullying tactics they are attempting!
10. UnCivilServant
February 3, 2011, 7:41 AM
What I don’t get is why we continue this farce. The residents of these “nations” have Us Citizenship and the right to vote in US elections, and thus should be subject to all taxes imposed on the rest of us. We should stop pretending that they aren’t part of this country. The annexation was complete almost a century ago, sweep away the last vestages of deceit and bring our fellow citizens into the fold.
11. WHAT A JOKE
February 3, 2011, 8:02 AM
The tribes want New York services? The Tribes should then pay New York taxes. What’s complicated here? The Tribes can’t have it both ways.
12. Albany Resident
February 3, 2011, 8:50 AM
How about we cut the $130,000,000.00 out of the budget. If the blood-suckers at the capital don’t have it, maybe, just maybe, Cuomo won’t let them spend it. But thats probably as much a pipe dream as collecting the tax is in the first place. However I do like Lwoodbluz take on it. We have checkpoints at the entrances/exits to our other “Nation” neighbors, they want soveriegnty then treat them like it!
13. K2
February 3, 2011, 9:28 AM
@ mom of three, if they are a sovereign nation why do they receive state and federal funds.
They can accept our tax dollars but can’t collect taxes on non-natives? It is one or the other not both.
14. From Western New York
February 3, 2011, 10:41 AM
The new tax revenues will NOT be achieved. First off, there is the whole issue of elasticity. People will buy fewer cigarettes. Second there is whole substitution issue. People will seek other, cheap sources. Finally, part of the tax revenue will need to be diverted to pay for unemployment, welfare, WIC, etc. as New York Jobs are killed by the Governor.
15. Robin Hackett
February 3, 2011, 11:02 AM
@From Western New York…you’re right. I already buy my ciggarettes in the states I travel through. I haven’t bought a pack in NY since Patterson’s last luxury tax increase.
16. jimbo
February 3, 2011, 12:55 PM
If the Tribes have to tax non-residents, their cigarette sales will drop like a rock anyway, so the revenue the budget is projecting in new taxes is just an excuse to spend more money they won’t have.
The border patrol checkpoints on the tribal territory boundaries is an interesting idea. I wonder how many state workers they would have to hire to man those stations? They could easily suck up all that extra revenue and create new state worker jobs at the same time. The additional funds would never make it out of the administrative funds necessary to implement it, the unions would look good and a few western state lawmakers would look good come next election……
17. WNYTaxpayer
February 3, 2011, 1:10 PM
All DTF has to do is to subpoena the Merchant Account Processors for the Indian retailors and compare the list of who made purchases with visa, mastercrad, etc. that did not report it on their state income taxes and issue notice of deficiencies to them.
18. can't uc
February 3, 2011, 3:16 PM
If the plan is imposed on the natives to collect taxes on sales to non-natives , it will only create a huge black market making more natives very wealthy.
19. pragmatic
February 3, 2011, 7:26 PM
It is time for Andy to stand up and shut down the indian casinos. Spitzer had the chance but lacked the courage. Lets see if Andy has the guts to stand up to this special interest group
20. John Kane
February 4, 2011, 10:10 AM
We should be clear that the state knows this new law will not generate revenue from Native sales. The intent of the law is to shut off supply to Native retailers of unstamped product. If Native retailers lose their regulatory advantage, Native sales will end. The question is will those sales be made elsewhere and where? The numbers that are being used in this budget are a sham. They are based on past sales and assume that as Native sales are lost that a significant portion of them will become taxed sales. Over the past year Native sales in Western New York have fallen by 80% due to shutting down the US Post Office from delivering remote sales of tobacco. Even without Native sales, the state loses far more than $130 million in revenue leakage to out-of-state sales; this would obviously increase with the loss of Native sales, which by the way still contribute to the NYS economy. Of couse a fair amount of people will just not be able to afford to smoke and while that maybe a good thing from a health standpoint, it certainly does nothing for the state’s budget. The other thing, only lightly touched on by other comments is the price of enforcement. The last time the state did battle with the Indians it cost $23 million per month and that was before troopers were making $100,000 per year. The final point overlooked is the resiliency of Native retailers. They will still find product to sell, with or without New York State wholesalers.
21. John Kane
February 4, 2011, 10:19 AM
Another point that the media refuses to point out is that the state allows everyone in the state to purchase and consume in the state cigarettes without NYS tax applied up to two cartons per consumer. NYS Form CG-15 for Cigarette Use Tax clearly lays out the exemption (http://www.tax.state.ny.us/pdf/2010/altab/cg15i_710.pdf). Apparently, the state’s position is that these untaxed sales can be made anywhere outside New York's jurisdiction except on Native lands.
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2 comments:
The link to the blog this was pulled from is http://blog.timesunion.com/capitol/archives/55703/once-again-indian-tobacco-taxes-assumed/
Check it out. More comments have been added since I posted it here.
Did everybody miss this article? I seen on another website, John Kane, that you were asking for some numbers from Tom Precious and mike Beebe that the states casinos were making. Well here they are from a different reporter. They actually have 8 facilities, we only have 3. They would like to do away with our casinos, but you can bet they want to keep theirs.
Buffalo News
City and Region
TOWN OF HAMBURG
Walters sees threat to casino funds
BY BARBARA O’BRIEN
NEWS STAFF REPORTER
Updated: February 5, 2011, 6:29 AM
The Town of Hamburg would lose more than $1 million in revenue sharing from the Hamburg Casino under Gov. Andrew M. Cuomo’s proposed budget, Supervisor Steven J. Walters said Friday.
“I understand the state is in a fiscal crisis and that everyone has to share in the suffering,” Walters said during his State of the Town message in Michael’s Banquet Facility. He said the revenue from the casino’s video lottery terminals had been reduced by more than 20 percent over the last three years. This year, the town incorporated $1.2 million in its budget for the revenue.
Walters said the state raises more than $500 million from eight facilities offering video lottery terminals. Yonkers receives nearly $20 million, and the remaining seven host communities split $6.2 million, he said. Under the proposed budget, he said, only Yonkers would continue to share in the revenue.
Assemblyman Kevin Smardz, R-Hamburg, who had been a Town Board member until his State Legislature term began Jan. 1, said that, for years, the state had been rumored to be planning to withdraw the funds.
“It’s our job to fight for it,” he said.
The supervisor noted that Cuomo’s proposal comes after the state increased the town’s required contributions to the state pension system by 90 percent over the past two years.
“This latest proposal is beyond sharing the pain,” he said.
Speaking to about 120 people at the luncheon sponsored by the Hamburg Chamber of Commerce, Walters said he had looked at last year’s State of the Town address.
“It struck me how so many of the challenges I outlined last year continue: dwindling revenues, increased state mandates and an even greater call from the public not to raise taxes,” he said.
Despite the challenges, he said, the outlook for the town is bright.
He said 16 full-time employees retired last year, and he pointed to consolidation of the Recreation, Senior and Youth departments into one department as an example of cost cutting that enabled the town to produce a fourth consecutive budget with no tax increase.
Walters also announced that the town will create a recreation foundation to promote and raise funds for recreational services. He said the foundation will support the newly consolidated department and will provide a vehicle for those who want to make donations to recreational programs.
The multimillion-dollar water project, he noted, is complete, and final steps are being taken to merge the town Water Department with the Erie County Water Authority.
Walters said that while this year will be filled with more financial struggles, “we will continue to seek solutions.”
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