Tax Shinnecock Smokes

As of April 1, New York State, bowing to a 1994 Supreme Court decision, will begin collecting sales and excise taxes on cigarettes and gas sold on Indian reservations.

Three stores on the Shinnecock Reservation in Southampton will be affected: the Shinnecock Smoke Shop, the Shinnecock Indian Outpost, and the Thunderbird Coffee Shop. All sell tax-free cigarettes to the general public.

Cigarettes sold to those who live on the reservation will not be taxed.

The Shinnecocks are negotiating with the state under the umbrella of the First Nations Business League, which also includes the Unkechaug tribe and parts of the Seneca, Mohawk, and Oneida tribes, to find a way around the ruling.

No Progress

So far, however, according to state officials, in 12 meetings, conducted via conference calls and in person, they have made almost no progress, though certain upstate tribes, negotiating separately, seem near an agreement.

Tom Crippen, manager of the Shinnecock Indian Outpost, contradicted the state's claim in a press release that the talks had "broken down" and that the Indians had not made "goaod faith efforts." He noted that the Indians had had to reschedule meetings becuase of the death of an Indian leader and conflicting traditional Midwinter Meetings.

He said another meeting with the state, arranged before the State Department of Taxation and Finance announced it would proceed with collection, is set for collection.

The state "needs to provide a level playing field for the businesses off the reservations," said Michael McKeon, Governor Pataki's press secretary.

Wholesalers who supply the Indian merchants, not the merchants themselves, will be responsible for the collection and submission of taxes to the state. The retailers will, however, be required to keep a record of all sales to reservation residents.

If reservations run out of tax-free cigarettes, they can sell taxable cigarettes to tribe members and apply for refunds on the tax paid, said Marvin Nailor, Director of Commerce.

The state collects some 56 cents sales tax and 64 cents in excise tax per pack of cigarettes. Lost income from the failure to collect these taxes has been estimated as high as $300 million a year.