Senator Maziarz Calls on the NYS Tax Commissioner to Put the State's Policy in Writing; Again!

June 27,2012


Commissioner Thomas H. Mattox
New York State Department of Taxation and Finance
Building 9, State Campus
Albany, New York 12227


Re:  Native American Cigarettes


Dear Commissioner Mattox:


I write today as a follow-up to my May 16, 2011 letter regarding the collection of New York State Sales Tax on Native territories for the sale of tobacco products to individuals that are not Native American. To date, I have not received a response from your office to clarify the State's policy on this issue.


In the meantime, there have been other developments relating to Native American cigarettes that require further clarification from your office. For instance, the NYS Office of the Attorney General recently directed certain manufacturers of Native Brand cigarettes to cease and desist shipping, selling and distributing such brands in New York State (including on Native territories). The Attorney General's office cited the role of licensed stamping agents and required state excise taxes as the reason for the order.


The position of the attorney General's office seems to contradict a recent decision of the NYS Supreme Court in St. Lawrence County. The June 18, 2012 decision related to the taxability and seizure of Native American cigarettes that were made by a New York manufacturer and shipped out-of-state. In that decision, the judge rejected the contention that New York State tax laws only allow manufacturers of Native Brands to make out-of-state sales through a licensed agent so the taxes can be prepaid through the purchase of stamps.


In my view, the recent court case acknowledges that Native Brand cigarettes that are produced and sold on lands owned by Native Nations constitute commerce that is Native to Native. As such, these transactions cannot (and should not) be regulated or taxed by the State of New York. To do so would be contrary to the sovereign rights of the Native American Nations, and would have a significant negative impact on the Native retail economy.


Although the NYS Supreme Court case starts to provide some direction on the status of the taxation of Native American cigarettes, there is still much uncertainty in this area. Consequently, we request that you provide written clarification to us as soon as possible. It is critical that the citizens of New York and their elected representatives know the intention of your Department with regard to the collection of State taxes on Native Brand cigarettes and tobacco products.


I look forward to your timely reply and toward working with you to resolve these important issues. 


Sincerely,


George D. Maziarz
Senator, 62nd District