"Last month I wrote an article in the Native American Times where I argued that, from an economic standpoint, New York State’s recent legal attack on tribal sovereignty made absolutely no sense. I argued that the state’s approach to taxation – forcing tribal governments to act as New York tax collectors – had to be more involved than meets the eye. In essence, the state’s tax enforcement policies allow $1.4 billion to slip through its hands. Instead of focusing on this revenue, however, New York has chosen to specifically target tribal smoke shops, a strategy that recoups only a very small fraction of what the state would recover were it to use those same resources to force its own citizens to comply with its own tax laws on its own land.
New York’s threatened attacks are now a reality. Since June 21, 2011, the state has ramped up its enforcement by trailing vehicles that leave the Reservations, inspecting tax stamping agents’ inventories, and secretly conducting surveillance on Reservation smoke shops. Although not quite as vulgar as New York City Mayor Michael Bloomberg’s proposal of getting “a cowboy hat and shotgun [and] standing in the middle of the New York State Thruway,” the recent attacks on tribal sovereignty are offensive nonetheless.
Today, I put forth another reason that New York’s recent attack makes no sense: We’ve already been through this, and we know the outcome. Although tribal retailers are legally obliged to collect state taxes on sales to non-Indians in many instances, states do not have the jurisdiction to enforce their law on Reservation sales. When compared to other alternatives, states actually lose a lot of potential revenue by engaging in zero-sum tax battles with tribal governments."
Get the Story:
Ryan D. Dreveskracht:
Maybe it is about the Money: Making Economic Sense of the New York Cigarette Fiasco (The Native American Times 7/26)
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