New York Gov. David Paterson (D) is proposing to collect taxes on the sale of tobacco to non-Indians.

Paterson and his predecessors have declined to issue regulations that would force tribes to collect the tax. But as part of the 2010-11 Executive Budget, the governor said the state will end its long-held policy of ignoring the issue.

"The Department of Taxation and Finance will withdraw its Advisory Opinion regarding the Department’s policy of forbearance of sales by agents of unstamped product to Indian retailers," the governor said in a briefing book. "The Department will promulgate rules and regulations to implement the Indian tax exempt coupon system."

"This action will permit the State to seek the lifting of the injunction preventing the State's statute prohibiting the sales of unstamped cigarettes to Indian retailers from going into effect," the budget stated.

Additionally, Paterson is proposing to raise the cigarette sales tax by $1 a pack.

Get the Story:
Paterson Going After Indian Cigarette Taxes (The New York Observer 1/19)