Cuomo must stay firm on tobacco tax

Talk is cheap — especially when it comes to New York state’s ability to collect taxes on cigarette sales by Indian-owned businesses to non-Indians. Four governors failed to do so, despite promises, and now, as a fifth prepared to finally go where no governor has gone before, there’s a new glitch in the process.

Nevertheless, Gov. Andrew Cuomo must remain committed, work through the latest delay, and begin collecting the tax.

On Monday, the 2nd Circuit court upheld state authority to collect taxes on cigarette sales on reservation land to nonmembers of the tribe. The appeals court upheld a lower court.

But on Tuesday, a state judge issued a temporary restraining order barring New York from collecting its $4.35-per-pack tax until a June 1 hearing to determine whether the state followed its own rules in adopting taxing regulations. The order had been sought by the Seneca Indian Nation,

Gov. Cuomo earlier said he’s ready to start collecting the tax. His father, Mario, was governor in 1994 when the U.S. Supreme Court ruled that it was legal for the state to collect the tax from non-Indians, but he didn’t try. George Pataki did, but he was frightened off when the Senecas burned tires on the state Thruway in 1997. Eliot Spitzer promised during his campaign to collect the tax, but resigned in 2008 and never had a chance to act. In December 2008, Gov. David Paterson came to Utica and signed a bill that would ultimately result in tax collection. But he, too, failed to act.

Last June, state officials voted to begin collecting the revenue on Sept. 1, 2010, but legal challenges blocked the law from taking effect. Monday’s Court of Appeals ruling changed that, but Tuesday’s order threw up a roadblock. The law allows Indian tribes to keep tobacco sales to their members free of the per-pack tax, but requires the tax on cigarette sales to others.

Andrew Cuomo said he expects to collect more than $100 million annually as a result.

Prior to the restraining order, Cuomo said: “I have always said that taxes on cigarettes sold to non-tribal members must be collected because this is revenue rightly owed to the state … my administration will move to do so expeditiously.”

Cuomo needs to stay the course, remain relentless in removing legal obstacles, and begin collecting the tax that rightly belongs to New York state.