Thursday, June 9, 2011
The State Clears Another Hurdle to Cut Off Its Supply to Native Stores
I have to start off by clarifying certain misrepresented facts. Nothing the state is doing will force tax collection on sales of tobacco products on Native lands. The whole scheme is designed to stop New York State wholesalers from supplying unstamped and untaxed cigarettes to Native wholesalers and retailers. No law has been passed to prohibit our sales; stamp or no stamp. The state knows they cannot do this. There is also no law that prohibits a non-native person from making un-taxed purchases from our territories. The fact remains that, under NYS law, ANYONE(of legal age) can bring up to two cartons of cigarettes into the state from any where for use and consumption without NYS tax or its stamp applied or any liability for that tax and that includes purchases from Native retailers.
The new law, when and if it ever does come into effect, will serve only to put a few NYS licensed wholesalers out of business. The state will not only see no revenue from this but will actually lose money from a whole range of areas directly from its actions. The job loss is one direct cost but so will the loss in MSA payments from Big Tobacco as more consumers shift to Native brands from those that pay millions to the state. Native brands will go from representing 80% of the sales from Native retailers to 100%. Of course the occasional load of Marlboros and Newports will still make it to the shelves of Native retailers but they will come from other states that will receive those MSA payments. The state will also have to decide how much they are willing to spend on enforcement. We have seen the state spend as much as $23 million per month in state police alone over this issue in the past.
The other cost to all this is the political cost and the damage in the relationship between the state and Native people. These types of disputes also tend to polarize the public not just on the issue at hand but on racial issues in general. One only needs to read comments to the mainstream media coverage of the issue to see comments that cross well into racism.