The Paterson Administration is backing off on plans to (finally) start collecting taxes on cigarettes sold by American Indian retailers, the Buffalo Newsreports. This will add $65 million in red ink to the state’s growing budget deficit.
The decision drew immediate and sharp criticism from health groups and an association that represents non-Indian retailers who say they cannot compete with the American Indians, who do not charge the state’s sales $2.75-per-pack excise tax.
“It’s embarrassing, and it’s outrageous that the Empire State can’t seem to figure out how to collect this tax when just about every other state does,” said Russell Sciandra, director of the Center for a Tobacco Free New York, which is connected with the American Cancer Society.
Critics say the state loses $1 billion annually by not collecting the cigarette tax. Seneca Nation of Indians retailers lead the country in the sales of untaxed cigarettes.