New York officials plan to collect unpaid taxes on cigarettes sold by Indian tribes to non-Indians.
The result is also establishing unlikely connections of cigarette makers and anti-smoking concerns who said that taxation would decrease the illegal sales and keep cigarettes out of the hands of young people.
The Legislature has pressed for collection the cigarettes taxes before, but past governors have refused, preferring to try to consult agreements.
For tribes like the Seneca Indian Nation, the tobacco taxes could mean an end to successes being made from an empire built on Internet sales to personal smoke stores on territories like the small Poospatuck Reservation on Long Island.
The Senecas declared that their sales provide millions more in spin-off economic profits to communities than the taxes would evolve. However tobacco manufacturers would like the state to collect the taxes on an estimated 28 million untaxed cartons a year.
David Sutton, spokesman for Altria, Richmond, Va.-based Altria Group Inc., parent company of Philip Morris USA, the nation’s largest tobacco maker, said: “If we had pressure of the laws on the books that would go a long way.”
Tobacco Companies believe that cigarettes taxes would protect their product from illegal activities, including illegal and inferior fake cigarettes packaged like branded products, which cut into profits and consumer loyalty.
Mr. Sutton also declared that it is easier for minor buyers to buy tobacco products over the Internet and by mail. More income could also forestall additional tax increases on cigarettes. A cigarettes pack now carries a $2.75 state tax, with another $1.50 tax added in New York City.
“The failure to collect the tax is a major public health problem,” said Russ Sciandra of the Center for a Tobacco Free New York, which finds itself on the same side of the argument as Philip Morris.
He argued that there are thousands of people who would quit smoking if they had to pay the full price.
Mr. Sciandra added that the point is that gathering the tax would significantly lessen sales on Indian Territory and income would jump around the state.
- Senecas back in court over NY cigarette tax plans
- The risks of levying cigarette taxes on Indian Nations
- Philip Morris Int’l Q3 Net Profit Increased by 31%