"In announcing the movement of the Oneida Indian Nation’s cigarette plant to its bingo hall on Route 46, the OIN has finally acknowledged the fact that treaties and quasi-sovereign status of the tribe do not prevent the state from the valid collection of sales tax on purchases made by non-member customers of tribally owned businesses whether those businesses are located on or off a reservation.

In a press conference, Chief Operating Officer Peter Carmen stated that the plant was being moved to the “Oneida homeland” because of the state’s plan to implement a sales tax collection plan on Sept. 1 and that the plan could be circumvented because of a federal law that supposedly preempts state efforts to tax products manufactured and sold on an Indian reservation. I know of no such law that would apply to cigarette sales, and I challenge Mr. Carmen to cite the law in this newspaper.

The U.S. Supreme Court rulings regarding this issue are clear; the reason states may enforce the valid collection of those taxes is that such collection does not “frustrate tribal self-government or runs afoul of any congressional enactment dealing with the affairs of reservation Indians,” and that principles of federal Indian law do not authorize Indian tribes to “market an exemption from state taxation to persons who would normally do their business elsewhere.” It doesn’t mention or matter where the cigarettes come from, the OIN will still be in violation because it will still be “marketing a tax exemption.”

Carmen stated that this issue is not about cigarettes, but is about “one government attempting to impose taxes on another government.” That is pure nonsense. The state is clearly taxing non-member customers and not the tribe."

Get the Story:
Scott E. Peterman: Cigarette customers, not tribe, taxed (The Oneida Dispatch 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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