You are here
ALBANY, N.Y. --
Just as the U.S. Supreme Court declined to consider a lawsuit over the state's tobacco tax, the New York Association of Convenience Stores (NYACS) is facing the possibility that New York may make cigarettes sold there the most expensive in the nation.
"We've been hearing the rumors and have been trying to track them back to their source," said James Calvin, president of NYACS. He and other lobbyists in the tobacco industry say they've heard reports for the past few weeks that Gov. George Pataki may seek to boost state revenues by raising cigarette taxes.
Pataki would not confirm rumors that the state is considering raising the tax on cigarettes to $1.50 per pack from $1.11, although that is the figure some lobbyists have heard, the Albany (NY) Times-Union reported.
NYACS claims that some convenience stores are seeing double-digit sales losses since the state raised the tax two years ago. It blames some of the loss on smokers' increased use of Indian reservation shops that don't charge sales tax and can offer cigarettes at sharp discounts. The association has been suing the state to get Pataki to require Native American retailers to charge the tax to non-Native Americans purchasing cigarettes at reservation stores. The convenience stores lost their suits in New York courts and earlier this fall petitioned the Supreme Court to hear its case. On Monday, Calvin said, he learned of the court's denial.
If the state raises taxes to $1.50 per pack, more smokers will flee to Native American retailers, bordering states with lower taxes and Internet distributors, Calvin said. "It's very disappointing, but we know we are right on this issue and will continue to pursue it through whatever legislative avenues or legal avenues at our disposal," Calvin said. "The greater the excise tax on cigarettes the greater the incentive to evade those taxes."
However, a manager at Seneca Hawk, a reservation store in western New York, said his shop hasn't picked up sales: "My volume is actually down from last year because smokers are cutting back," the report said. Anti-smoking groups called for a $1 tax increase to $1.55 two years ago when lawmakers voted to raise the fee by 56 cents.