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BUFFALO, N.Y. -- Under pressure from state officials, the Oneida Indian Nation has suspended its most recent plan to sell tax-free cigarettes at kiosks in a chain of Buffalo convenience stores shortly after opening the kiosks in April.
"We contacted the nation and let them know it was our belief that the kiosks were illegal, and that was the end of it as far as we know," Marc Violette, a spokesman for New York State Attorney General Eliot Spitzer told The (N.Y.) Post-Standard. "We said, 'Listen, this is not going to fly,' and they literally pulled the plug."
Officials from the state Department of Taxation and Finance also told the Oneidas to stop selling cigarettes from the kiosks, the report said.
Oneida nation spokesman Jerry Reed told The Buffalo News last week that the nation has "temporarily suspended the kiosks pending further review and discussion with New York."
Three kiosks were installed the day before a new cigarette tax hike of 39 cents per pack. The kiosks in the Yellow Goose chain of convenience stores allowed customers to buy tax-free cigarettes from the Oneida nation's Internet site.
Cigarettes sold by Indian nations are not subject to state taxes. The taxes on cigarettes sold in New York are now $1.50 per pack and even more in New York City. The Oneida nation still sells tax-free cigarettes at its SavOn convenience stores and on the Internet.
Violette said the kiosks were simply a way for smokers to avoid paying taxes and posed two potential problems: They were not on Indian land and they made it easy for minors to buy cigarettes. "Our belief was that anybody equipped with a credit card could go to the kiosk and order cigarettes," he said.
Oneida nation officials said in April they had put in place restrictions designed to weed out underage smokers.