I will be a guest on "The Capitol Pressroom with Susan Arbetter" on Wednesday, March 30th. The show airs live on WCNY and can also be heard live on
http://thecapitolpressroom.org/. The show is also broadcast on WBFO in Western New York on 88.7FM weekdays at 1 pm. For insight on the show topic, see the email I sent to the show's host below.
First I am sending a link to an article on my blog that captures most of my issues with "Attea".
http://letstalknativepride.blogspot.com/2009/04/attea-is-not-land-mark-case-against.html. If you have trouble with the link just go to my blog and search "Attea" to bring it up. The only thing not mentioned in this article was the emphasis the court had in Moe and Colville on the fact that the Native retailers were just selling a non-native product back to the non-native public with no value added to that product but simply the state tax bypassed. 80% of our sales are Native brands manufactured in one territory of the Haudenosaunee or another and distributed to all. These brands are available exclusively through Native retailers. While I may concede that the states, including NY, may have the authority to tax the purchases of their residents on products used or consumed in their states, I reject the claim that they have authority over Native sales made on Native lands. The reality is that the states may only have the right to impose a "Use Tax" on their resident when that use occurs within the state's jurisdiction. The states have no authority to regulate the commercial activity on our territories. I say this not as a treaty right but simply as a right that was never conceded, although the right to our "free use and enjoyment" of or territories is acknowledged in treaty after treaty. On this note let me list a few issues that are never addressed by those that promote the states' authority: As I said, while I may concede the state may have authority to impose "Use Tax" on its residents, it certainly doesn't in all instances. In fact according to NYS Form CG-15 (
http://www.tax.ny.gov/pdf/2010/altab/cg15i_710.pdf), everyone in the state is exempt from the cigarette use tax provided the cigarettes brought into the state for use do not exceed 400 cigarettes (2 cartons). With this in mind, the state is saying that all of its residents can leave the state's jurisdiction, purchase cigarettes without a NYS tax stamp and consume that product in the state. They just insist that those sales to their residents cannot be made from "Indians". The state does not consider their overreaching on the sales made on Native lands to non-native consumers that will not use the product in NYS. Many non-native consumers are from out of state. Prior to the passage of the PACT Act and losing 70% of our sale volume represented by remote sales, the vast majority of our sales were to out of state consumers (which, by the way, brought significant revenue into Western New York). Even still, with many of our communities close to the state borders, a notable percentage of our sales are to out-of-state residents. There is also no accounting for the consumption of cigarettes by non-native consumers on our lands. Since our territories are are among the last places on Earth that smoking is allowed in public places and between gaming facilities and other public events, it is fair to assume some of the cigarettes purchased by non-natives are not "used" in the state. There is simply no explanation how the state makes the leap from overturning "Attea" to claiming they have the right to stop Native retailers from selling cigarettes to non-native consumers without a NYS Tax stamp, especially when you consider that every other state and country can make those sales. Of course what I consider the white elephant in the room are Native brands. About a half dozen Native brands now represent over 80% of the sales of native retailers. The state's dirty little secret is that this is not about collecting taxes from Native sales but rather to end them. Several Native communities stamp their inventories and as such add a fee that results in a collective benefit to the community. Overnight, cigarettes will go from being discounted because of the Native regulatory advantage to being more expensive that off reservation prices. The state hopes that some of these lost sales will result in more sales of stamped product from off reservation sales. What is not talked about is to insure that all sales of untaxed product ends the state will essentially outlaw Native brands. Over the last few years the state and the ATF have collaborated in creating a circumstance that even Native brands are distributed by New York State wholesalers. Native brands were excluded from the Master Settlement Act (MSA) and as such cannot be stamped without the state forgoing the revenue they collect from MSA payments from Big Tobacco. Philip Morris has already challenged the making of MSA payments to NY because of the state's lack of enforcement of the MSA against Native brands sold on Native lands. Ironically, NYS had to defend our non-participation in the program citing that the MSA did not apply to us. This was obviously done to protect the state's revenue stream from the program that was borrowed against under the Pataki administration (a revenue that has already shrunk significantly since the PACT Act). So the end result is that once NYS wholesalers are required to sell only stamped products to Native retailers, Native brands will no longer be amongst them. Since NYS maintains that only state licensed wholesalers can ship unstamped cigarettes but not to Native wholesalers or retailers, Native wholesalers distributing Native brands to Native retailers will be subject to seizures and prosecution. The state would like everyone to believe that this is just about pre-collecting a tax that they are entitled to but much of the story is not spoken of. By attacking Native brands the state has moved well beyond interfering with commerce with "Indians" and clearly moves into interfering with the commerce of "Indians". the assumption that a Native wholesaler supplying a Native brand to a Native retailer will ultimately result in a sale to a non-native consumer does not give the state the right to impose itself on Native to Native trade. In fact the commerce clause of the US Constitution reserves the power to regulate commerce with "Indians" to Congress and makes no assumption about the delegation of authority to regulate the commerce of "Indian". It is interesting that Peter King is back in the news with his twisted views on terrorism. A few years back his office prepared a report entitled "Tobacco and Terror: How Cigarette Smuggling is Funding Our Enemies Abroad" (
http://chs-republicans.house.gov/list/press/homeland_rep/morenews/cigarettesmuggling.pdf ). In it he tries to make the public believe there is a direct link between Native sale of cigarettes and the funding of terrorists abroad. Patrick Fleenor with the Tax Foundation:
http://www.taxfoundation.org/, suggested to me that the direct to consumer sales by Native retailers has done more to undo the illicit tobacco trade than all law enforcement combined. He argues that our sales cut out the middle men, particularly with the remote sales that have now been forced off shore. Our legal trade that used to bring millions of dollars of revenue into Western New York has already began to slip into the shadows by closing down Native remote sellers (mail-orders) via the PACT Act. Now those remote sales are conducted by who knows who from Russia, a few European countries and several in Africa. The state's attempt to end our face-to-face sales will push more business to organized crime and perhaps even to Mr. King's dreaded terrorists. With over 70% of our sales lost to the passage of the NYS supported PACT Act, one would assume that the state would have produced volumes of financial statements showing the sharp increase in tax revenue but to the contrary the state must be losing significant MSA revenue due to all the lost sales of premium brands sold to out-of-state consumers. NYS received a MSA payment for every carton of premium brand cigarettes sold by Native retailers. With Philip Morris and others joining in on the attack of Native businesses those sale are relegated to less than 10% of sales by Native retailers. Believe it or not I am holding back to try to keep this brief. There is much more about this issue from the protections of Native economies laid out in the U. N. Declaration on the Rights of Indigenous Peoples to state and federal legislation continuing the assimilation programs of the past. I am not a smoker and I am neither in the business nor do I like the reliance on such an economy but if we can't defend our right to market our regulatory advantages in a legal product the way every other city, town, county, state and country does, no matter how un-PC that practice may be then what successful economic engine would be safe in our territories? Trust me, our fuel sales are next and gaming is always a battle.
John Kane - Karhiio
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