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    N.Y. Tax Plan Called "Extremely Unrealistic"

    C-store lobbying unlikely to result in collection of Native American tobacco taxes.

    ALBANY, N.Y. -- A major source of revenues in the Legislature's version of the 2003-04 state budget is a renewed effort to collect state taxes on sales of motor fuel and cigarettes on Indian land to non-Indians. The $93 billion spending plan now before Gov. George Pataki anticipates $186 million from the Indian sales to grow to $374 million in future years.

    Critics derided that budget item as pure fantasy. "I think that is extremely unrealistic," Pataki said.

    State Assemblyman Chris Ortloff, a Plattsburgh Republican, noted that New York has tried unsuccessfully for years to collect the Indian taxes, despite rulings in non-Indian courts that the state is entitled to the money. The state's Indian nations regard themselves as sovereign and not subject to those rulings, according to the Associated Press. "We haven't the ability and we haven't the time to sustain continued court challenges," Ortloff said. "We haven't the guts to challenge Indian sovereignty."

    Ortloff added that "we have no reasonable expectation of ever collecting a cent" of the taxes on transactions on Indian land to non-Indians.

    Seneca Nation of Indians President Rickey Armstrong Sr. said that ultimately, he believed "New York State's elected leaders won't make a decision that infringes on the right of Indian nations to self govern on any issues, including commerce." Back in April, leaders of the Seneca, Mohawk, Oneida and Cayuga nations re-established an Iroquois Tax Coalition to fight state attempts to tax tribal commerce. Indian merchants were no more receptive to renewed state interest in taxing their transactions than their tribal leaders are.

    Neville Spring, owner of ''The Rez'' on the Tonawanda reserve near Buffalo, contended that ''New York state is using Indians as scapegoats'' to help cover New York's $12 billion revenue shortfall," he said.

    "I'm not going to sit here and collect taxes for New York State," Wilie Parry, owner of Wolf's Run on the Seneca's Cattaraugus Reservation in Irving, N.Y. told the Associated Press. "I think they're going to end up with worse problems than they did in 1997."

    Pataki's skepticism at the prospects of collecting the Indian taxes is borne of experience. His administration tried to tax Indian tobacco and motor fuel sales in his first three years as governor, only to encounter stiff resistance and the threat of violence. He dropped the effort in 1997.

    Still, non-Indian merchants have continued to push the collection of Indian taxes as an issue of fairness. Because they are not charging state taxes on their transactions, Indian vendors can sell cigarettes at $15-$20 less per carton and gasoline at 5 cents-20 cents less per gallon than nearby non-Indian businessmen, James Calvin, president of the New York Association of Convenience Stores (NYACS), told the Associated Press.

    "The stores that dutifully collect the taxes have suffered the ill effects of tax evasion for years," said Calvin, widely recognized as one of the industry's top leaders in urging the New York State government to start collecting sales tax from Native Americans. "They have never asked for preferential treatment, just a chance to compete fairly for retail trade. That's what this would do it would restore a level playing field."

    Calvin conceded that it would not be easy to collect the taxes, but said there are ways it could be done. Most think the best chance the state has is to force Indian merchants to pay taxes at the wholesale level, when they receive cigarettes or gasoline from suppliers.

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