The Billion Dollar Bill - Magee Legislation Forces Governor to Collect Taxes at Indian Owned Stores and Smoke Shops

Given the state’s fiscal woes, bill could raise over $1 billion in currently uncollected revenue
February 3, 2003

Assemblyman Bill Magee (D-Nelson), whose District includes much of the Oneida Indian Nation’s land claim, has introduced a bill that would force the Governor to begin collecting the sales and excise taxes on sales of cigarettes and gasoline to non-Indians at Indian owned businesses.

“This isn’t rocket science,” Magee said. “We are facing an enormous fiscal shortfall, the courts have said we can collect these taxes and this bill simply forces the Governor to live up to his responsibilities by collecting the taxes on sales to non-Native Americans at convenience stores and smoke shops that are owned by Native Americans.”

According to a recently released study completed by a group of business associations under the name Fair Application of Cigarette Taxes (FACT), New York State is losing as much as $895 million in uncollected sales and excise taxes on the sales of cigarettes to non-Indians at, in large part, Indian owned stores and smoke shops. This number does not include either the sales tax that counties are losing on these sales of cigarettes or the state and local taxes that are being lost on the sales of gasoline and motor fuel to non-Indians at Indian owned convenience stores. The total amount of taxes going uncollected could easily be more than $1.4 billion a year.

“The truly amazing thing is that the governor actually points out in his budget proposal the toll that cigarette tax evasion places on our state and local government, yet he simply ignores the billion-plus dollars that go uncollected at Indian-owned stores,” Magee commented. “This is a very real problem that needs to be addressed but instead the Governor chooses to increase college tuition, deprive our senior citizens of affordable access to EPIC, and decimate our Empire Zones after he paraded around the state announcing their creation prior to the election.”

The bill (A.864/S.307) would specifically require the Commissioner of the Department of Taxation and Finance to promulgate rules and regulations necessary to implement the collection of sales and use taxes on retail sales, motor fuel, diesel motor fuel and cigarettes on Native American nation and tribe lands. One of the methods being advocated is to pre-collect the taxes from the distributor who would then factor that cost into the price they sell the fuel and tobacco products to the Indian Nations for.

“If we want to help cash strapped school districts educate our kids and if we want to help ease the burden on our counties and taxpayers then we simply cannot continue to ignore these billion-plus dollars in revenue that is going uncollected each and every year by this governor and is growing each and every year,” Magee concluded

The bill is sponsored in the Senate by Senator Michael Nozzolio (R-Seneca Falls).