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WEDNESDAY, AUGUST 14, 2002

A Democratic candidate for governor of New York is calling for the full taxation of Indian businesses, accusing tribes of not playing by the rules.

State comptroller H. Carl McCall said Tuesday the state is losing out on $200 million every year. He wants to enforce a law that requires reservation-based businesses to remit taxes on cigarette and gas sales to non-Indians.

"No New Yorker likes to pay taxes, but every honest New Yorker does," McCall wrote in a letter to Gov. George Pataki (R) that was released yesterday.

McCall laid the blame on the Pataki administration, which has opted not to collect the taxes. However, a New York appellate court has ruled that the state has a rational basis for not doing so.

A spokesperson for McCall and running mate Dennis Mehiel, who in some polls lead Democrat rival and former Clinton housing secretary Andrew Cuomo, also insisted the campaign was not singling out Indian Country. "It's something that should be applied to Internet businesses as well," said Steven Greenberg. "This is an issue of fairness."

But the Oneida Nation of upstate New York, one of the state's economic powerhouses, wasn't buying it. "Gubernatorial candidate Carl McCall is blowing smoke when it comes to collecting taxes from Indian nations," the tribe said in a statement.

"His suggestion that the state begin collecting cigarette taxes from Indian nations shows a fundamental lack of understanding of state and federal law, not to mention the sovereignty of those Indian nations, which is so critical for the leadership of this state," the statement continued.

Taxation has been a major issue for the state in recent years. As tribes and Indian entrepreneurs have brought reservations out of poverty, they have run into opposition from local governments, anti-treaty rights groups and politicians.

The law so far is on the tribes' side. The Oneida Nation recently won a case which struck down taxation on their lands. Also, a federal court ruled as unconstitutional a law requiring collection of state taxes on Internet sales.

In all three areas -- cigarettes, gas and online -- tribes and Indian-owned businesses can opt not to collect taxes on sales to Indian or non-Indian customers. State-recognized tribes, such as the Shinnecock Nation, enjoy the same right.

Greenberg yesterday said the campaign didn't have a breakdown on the sales of cigarette and taxes to non-Indians.

McCall is facing scrutiny over an arrangement which has Mehiel paying for about half of McCall's staff members. A campaign manager for Cuomo filed a formal complaint yesterday with the state Board of Elections.

Related Documents:
Oneida Nation Statement (8/13)

Relevant Links:
McCall for Governor - http://www.mccall02.org/html/home.shtml

Related Stories:
Court rules on taxes (8/04)
Ban on online cigarette sales struck down (6/11)