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TAX NEWS - June 2010

Push To Collect Tax Is On

Lawmakers Want Regulations In Place By July 1 To Collect Sales Tax From Non-Indians
Assembly Republican Brian M. Kolb, R, I, C-Canandaigua, and other members of "Enforce the Law - Collect the Tax" are reminding Gov. David Paterson they would like regulations to be in place by July 1 so the state can attempt to collect sales tax on goods sold to non-Native Americans on Indian land.

Kolb and coalition members held a news conference Tuesday in Albany. Kolb said the U.S. Supreme Court "clearly articulated" the state has a right to collect taxes. That has yet to be done, however, and Kolb said he wonders why, especially in light of others trying to compete for business who have to collect the tax.

"We're raising our voice again to push" for the governor to collect the tax, said Kolb. "We've put this off for too long.''

Kolb said he represents two counties that are "negatively impacted" by non-collection. Kolb is minority leader in the Assembly. First elected in 2000, he represents the 129th Assembly District, which includes Cayuga, Cortland, Onondaga, Ontario and Seneca counties.

"I'm cautiously optimistic," he said about regulations being put in place so tax collections can be attempted. He said he wants to bring the issue to light, however, "until the proof is in the pudding."

Kolb said state officials want to provide a mechanism to collect the tax that they think does not interfere with sovereignty.

"If you live in this state, this country, you have to obey laws. It's not right to have two sets of rules," he said, adding a pre-collection method that allows tax-free services for Native Americans could be a way to tackle the issue that has resulted in Seneca Indian protests previously since Senecas report state tax collections on their land violates treaties the Seneca Nation has with the federal government. Seneca representatives could not be reached to comment Tuesday, nor could Gubernatorial Spokesman Morgan Hook.

Patterson previously rescinded a "forbearance" stance on collecting the tax and issued regulations the tax department is considering instituting. The regulations were publicized in March, when a 45-day comment period on them began. Comments are since being reviewed.

Other members of the coalition include Jim Calvin, president of the New York Association of Convenience Stores and Michael Elmendorf, president of National Federation of Independent Businesses. The coalition has a website, which includes its own estimate of how much New York could be getting if the tax were to be collected - nearly half a billion dollars.

"By quintupling the excise tax on cigarettes in the span of eight years without closing off well-established channels for dodging that tax, New York State government incited today's all-out epidemic of tax evasion. This ever-widening crisis is crippling legitimate small businesses, squandering desperately needed tax revenue, promoting lawlessness, and thwarting anti-smoking initiatives," said Calvin via the website.

It states Enforce The Law - Collect The Tax Coalition is a group of associations, businesses and other organizations that share the goal of demanding the state of New York enforce its own laws and collect the excise taxes on cigarettes sold through Native American reservations to non-tribal members

In another related issue, the U.S. Postal Service is expected to stop mailing tobacco products June 29 after the federal Prevent All Cigarette Trafficking Act was passed earlier this year and signed into law by President Obama.
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