Starting on Wednesday, the state of New York will impose a tobacco tax on reservations unless a federal judge takes action.

Wholesalers that sell tobacco to tribal retailers must prepay the state's tax. The plan essentially forces tribal retailers to collect the state's tax on tobacco sold to non-Indians.

Tobacco sold to tribal members will remain tax-free. The state gets to determine how much each tribal retailer gets, based on U.S. Census Bureau data on reservations.

Tribes say the plan violates their sovereignty, their regulatory systems and their treaties. But a federal judge so far has declined to block the state from imposing the tax.

The state's tobacco tax is the highest in the nation. Non-Indian smokers have been flocking to reservations to buy cigarettes before tomorrow's deadline.

The Seneca Nation, the Oneida Nation and the Onondaga Nation say they will drop big tobacco brands and sell Indian brands as a result of the plan. The St. Regis Mohawk Tribe also says it might stop selling big name tobacco.

Get the Story:
Senecas lose one court battle over cigarettes (The Dunkirk Observer 8/31)
State lawyers win another round in cigarette tax battle (The Buffalo News 8/31)
Fast sell for tax-free cigarettes (The Buffalo News 8/31)

Relevant Documents:
ATF Letter on Tribal Consultation (May 19, 2010)

Prevent All Cigarette Trafficking Act:
H.R.1676 | S.1147

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