Wednesday, February 15, 2012
Believe It or Not, There are Bigger Issues
Before the frenzy caused by a New York State Senator and his wife rolling around the floor of the Seneca Niagara Casino, a bigger problem was creeping up on Native Territories.
A law passed back in 2009 called the Children's Health Insurance Program Authorization Act or CHIPRA has created a circumstance where the IRS now feels compelled to assess a tax, the likes of which has never before been seen on Native land or by Native people. The act increased the Federal Excise Tax or FET on cigarettes by $6.16 per carton to cover health care for children. A Floor Stock Tax is also provided in the act, which was intended to prevent non-native retailers, wholesaler and distributors of tobacco products from buying huge overstocks of cigarettes and other tobacco products in advance of the tax increase to avoid paying it on that stock.
Almost three years later a trickle of "Inquiry Letters" have begun showing up at certain Native tobacco shops. The letters read that "The Alcohol and Tobacco Tax and Trade Bureau (TTB), an agency of the US Department of the Treasury... has received information that you may have held tobacco products for sale on April 1, 2009(the day the FET increase came into effect)." As such the TTB took it upon themselves to assess the tax liability, penalties and interest and include it in their letter of inquiry. Individuals have be assessed this tax in amounts that range from $50,000 to $1.5 Million and the "letters" keep rolling in.
Never before in our history has the federal government(or state) attempted to tax us for products that were in our possession on our territories after-the-fact. Never have they said that once the clock struck midnight on April 1, your paid in full purchases are no longer paid in full. Never before have they said, Oh yeah, by the way, that product you bought 3 years ago; you owe us $200,000 more on it and because it's three years later, make it $300,000 now for penalties and interest.
Two quick meetings, one with the office of one of the Congressmen who voted to pass this bill and one with the office of one of the US Senators who did as well, resulted in them coming to the conclusion that this is "unintended". So now what? I simply suggested that if they didn't mean to pass a law that would once again be twisted into another affront to our sovereignty, not to mention an attempt to whisk away tens of millions of dollars(maybe 100's when all the "letters" are sent) away from Native communities, that they fix it. I suggested that if we were not specified in the law, that he IRS and TTB are making a huge assumption. I also said that even if it was intended, it assumes authority that has no foundation in law anywhere. I offered to help them raise the question by offering to meet with the White House Senior Adviser on Native American Affairs to discuss the issue if they would facilitate such a meeting. One nagging issue with the "letters" is the 45 day time limit to respond called out in them. I suggested while some may respond to the Inquiry Letters by requesting more time to address the issue, many would not. I encouraged the legislators to call off the TTB dogs to allow them more time to resolve this and to stay out in front of the IRS or TTB taking any action against Native people on this.
Hopefully level heads will prevail and a simple phone call from 1600 Pennsylvania Ave. will make this go away. Wouldn't it be great if simple and direct talks could resolve conflicts like this, without lawyers, lobbyists, PR firms or bank account seizures, arrests or Thruway closures? Let's hope and stay vigilant.