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    Cigarette Tax Battle Roars in Upstate N.Y.

    Words exchanged between state rep. and Oneida Indian Nation get ugly.

    VERONA, N.Y. -- Last week, state and local officials here repeated their request for the Oneida Indian Nation to begin paying taxes, the Observer Dispatch reported.

    State Assemblyman Dave Townsend (R-Sylvan Beach), said the Oneidas should level the playing field when it comes to taxation, during a meeting in front of Arnott's Super General Store.

    He added the Nation should work with its neighbors, including Oneida and Madison counties, to help the overall area, the report stated.

    "It's costing the local government and local businesses millions and millions of dollars," he said.

    As a response to Townsend's announcement, the Nation issued a statement that did not outwardly address the tax issue, but did call Townsend "uneducated," according to a separate Dispatch report.

    "When a person continually voices false statements, you say that person is misinformed, uneducated, or a liar. By his rhetoric and actions, Mr. Townsend appears to be all three," the Dispatch quoted the Nation as stating.

    The Nation is trying to use a personal attack instead of addressing the actual tax issue, Townsend told the paper. "If I tried to make it personal they'd call me a racist," he said. "When you have nothing else to stand on, you get personal."

    Gov. Eliot Spitzer has said he plans to collect sales tax from the Nation and others in the state, which could bring in between $4 million and $8 million annually in the county, according to officials cited by the paper.

    Local businesses are also being affected by the Nation's tax-free status. Arnott's, where Townsend expressed his position, is located near two Nation-owned SavOn convenience stores.

    Store owner Bob Arnott told the paper the tax-free status does significantly affect his sales.

    "His neighbors down the road that he is in competition with don't play by those same rules," Townsend said.

    The New York Association of Convenience Stores (NYACS) has fought for a level playing field between Native American and non-Native American retailers in the area for some time.

    The organization has frequently attested that the 7,000 members are unable to compete with Native American retailers' reduced prices. The group brought a lawsuit against former Governor George Pataki, his tax commissioner and wholesale distributors concerning the issue, but it was dismissed by New York State Supreme Court Justice E. Michael Kavanaugh in December.

    "We're kind of puzzled," NYACS president James Calvin said at the time. "If the chief elected official of the state doesn't feel like enforcing a law that was duly enacted by the legislature, and the chief law enforcement official of the state defends that defiance of the constitution, then who does have standing to challenge it in court?"

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