Make Indian cigarette smugglers quit
We never believed it was impossible to stop the illegal, tax-free sale of cigarettes by Indian tribes in New York state that went on for so many years. It was more a lack of political will. Now that laws have been passed, at both the federal and state levels, to address the problem, and they are working, it’s important to keep enforcing them.
That’s what New York City is trying to do with a lawsuit against a Virginia-based company that has helped the Seneca Nation continue to deliver cigarettes illegally, by not charging customers the required tax of $5.85 per pack.
The tribes have long claimed that they are sovereign nations and able to sell cigarettes without being subject to taxation by the state. But the tax-free argument applies only to sales to their own people on the reservation; non-Indians are supposed to pay tax on those purchases, whether made on or off the reservation.
The federal government addressed the off-reservation part when it passed legislation in 2009 barring the Postal Service from shipping cigarettes, and major delivery companies like FedEx and UPS separately agreed to end deliveries. And the state finally addressed the on-reservation sales in 2011 by requiring licensed wholesalers to affix tax stamps to cigarettes shipped to reservations and pay the tax to the state upfront.
Together, these two actions have badly hurt tribal businesses. That’s too bad for them, but good for state coffers; for local, tax-collecting businesses with whom the tribes were competing unfairly with their cut-rate smokes; and for young people, who could no longer obtain by mail order cigarettes that they couldn’t legally purchase in a store.
It would be a shame if the tribes were allowed to circumvent these anti-smuggling efforts, and undo these gains, by simply using smaller companies to ship their product. That’s why we hope New York City wins its lawsuit.