Tribal leaders and Indian business owners in New York are preparing for legal battles over the state's tobacco taxes.

Under a new law that went into effect March 1, tribal- and Indian-owned retailers are supposed to ensure taxes are collected on the sale of goods to non-Indians. But Gov. George Pataki (R), citing tribal sovereignty, has said he won't enforce the law.

The decision has allowed for a wholesale company to continue shipping tobacco products to reservations in the state. But tribal and business leaders say the battle isn't over as long as attorney general Eliot Spitzer, a proponent of the tax law, is a candidate for governor. They say they are willing to spend as much as $5 million on a public campaign to support their rights and oppose Spitzer.

Non-Indians are also ready for battle. The New York Association of Convenience Stores claims the state is losing out on $1 billion in revenues by refusing to impose taxes on reservations. A supermarket chain in New York City, frustrated by the lack of enforcement, is suing two state-recognized tribes for selling tobacco to non-Indians without collecting state taxes.

Get the Story:
Indians see tax battle with Spitzer (The Buffalo News 3/19)
Indians relieved over cigarette tax decision (AP 3/19)
Pols fume as cig tax is ignored (The New York Daily News 3/19)
Supermart is smokin' mad (The New York Daily News 3/20)
Gristede's To Sue Indian Tribes Over Unenforced Cigarette Law (The New York Sun 3/20)

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