Editorial: Enforcing law could boost state coffers

Staff Writer
Mount Shasta Herald

AT ISSUE: Negotiating on gasoline, tobacco taxes isn’t the way to go

Gov. David Paterson might mean well, but he should forget negotiating with Indian tribes when it comes to paying state taxes on gasoline and tobacco.

Instead, New York should just enforce the law.

In a meeting with the Observer-Dispatch editorial board Monday, Senate Majority Leader Dean Skelos estimated that the state is losing about $1 billion annually in revenue from the state’s failure to collect taxes on cigarette and gasoline sales to non-Indians at Indian-owned businesses. Skelos, R-Rockville Centre, blamed governors dating back to Mario Cuomo for not getting the process going.

Skelos is right. The U.S. Supreme Court ruled in 1994 that the state could legally collect taxes on tobacco and gasoline sold by Native Americans to non-Indians. Cuomo, governor at the time, never bothered to try. His successor, George Pataki, made an attempt, but backed off after members of the Seneca Indian Nation burned tires on the state Thruway in 1997. That led to confrontations with state police and forced the closing of a section of the interstate.

The state prepared again to collect the tax in 2003, but Pataki delayed it to “seek more public input.” Nothing happened. Pataki vetoed a similar bill in 2006.

Eliot Spitzer said he would collect the tax, but his career went up in smoke before anything happened.

Now it’s up to Paterson. He has asked the Legislature to delay sending him a bill it approved last summer that would require tobacco wholesalers to certify — under penalty of perjury — that they won’t supply cigarettes to retailers unless the packs have a legal New York state tax stamp. Wholesalers wouldn’t be able to buy from manufacturers unless they provide tax certification.

Paterson said he prefers to negotiate on collecting the taxes not only on tobacco and gasoline, but on casinos, too. That’s admirable, but how many years have we talked about negotiated settlements of any kind with Indian tribes?

We don’t need more talk. Better to just enforce the law.

Assemblyman Bill Magee, D-Nelson, who sponsored the most recent bill, said it wouldn’t even be needed if the state Department of Taxation and Finance enforced laws already on the books.

You can be sure those laws would be enforced if area convenience store owners decided to stop paying state taxes. Such a double standard is not only unfair to them; it’s unfair to all New Yorkers, especially at a time when $1 billion could help a state struggling for its fiscal life.