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    Senate Passes Bill Banning U.S. Mail Cigarette Shipments

    Measure would affect Native American online smoke shops.

    WASHINGTON -- A largely unnoticed bill passed in the Senate last week that will have an important, negative effect on the online smoke shops belonging to Native American tribes, according to The Buffalo (N.Y.) News.

    The bill would ban the shipment of cigarettes through the U.S. mails.

    The legislation, which passed by a largely unnoticed voice vote in the closing moments of the Senate's 2003 session Tuesday, also includes harsh sanctions aimed at blocking online tobacco transactions, according to the news report.

    Though similar legislation has not yet passed the House, Seneca merchants in New York State are concerned enough about the Senate's action that they're considering writing a letter to President Bush to complain.

    Would the Senate bill end the Senecas' online businesses if it became law?

    "As far as a shipment kind of thing, it would," said Joseph F. Crangle, an attorney for Seneca tobacco sellers, according to The Buffalo News.

    The bill would also allow states to force private shippers such as Federal Express to either collect cigarette taxes or certify that they have been paid.

    The bill makes violating reporting requirements a felony, but also allows states the option of assessing a civil penalty instead for such offenses, and reduces the threshold for cigarettes to be treated as contraband from 60,000 to 10,000.

    The bill's chief sponsor, Sen. Orrin G. Hatch (R-Utah), said the bill is mainly intended to shut off the flow of contraband cigarettes sold by organized crime syndicates and even terrorist organizations. But it's also intended to cut down on all tax-free Internet sales, the news report stated.

    The bill, the Prevent All Cigarette Trafficking Act, will give states the authority to collect millions in lost state tax revenue resulting from online and other remote sales of cigarette and smokeless tobacco, said Sen. Patrick Leahy (D-Vt.).

    To Crangle, though, the bill aims at the heart of the Senecas' legal rights. He said it would violate an 1842 treaty that gives Seneca land immunity "from all taxes, and assessments for roads, highways or any other purpose."
    The Senecas view that passage as meaning that "you don't have to collect someone else's taxes on their property," Crangle said.

    That's what the tribe's merchants would argue in a letter to Bush -- and to federal courts if necessary, Crangle added, according to The Buffalo News.

    Operators of the nation's convenience stores view things differently. They look at the bill as an attempt to stop an unfair business practice.

    "What they're doing is not right," said Allison Shulman, director of government affairs at the National Association of Convenience Stores. "They're selling cheap cigarettes to kids."

    Shulman said she was disappointed with one provision of the Senate bill. In order to get the bill passed quickly before the end of the session, Hatch dropped language that would have allowed states to sue Native American tribes that violate their tax obligations.

    Sens. Ben Nighthorse Campbell (R-Colo.) and Daniel Inouye (D-Hawaii) threatened to block the bill unless that language were dropped, arguing that it would violate the sovereignty rights of tribes nationwide.

    But a similar House bill would permit states to sue tribes, and Shulman said she hopes that bill is passed and merged with the Senate bill early next year.

    John Dossett, general counsel for the National Congress of American Indians, said his organization has at least one remaining concern about the Senate bill.

    It includes a provision that allows states to compile lists of retailers who don't collect state taxes, and in turn tell shippers that they can't ship packages from those sellers.

    "It's a backdoor way of gaining enforcement powers over Indian sellers," Dossett said.

    If such a bill becomes law, it would affect the Senecas more than any other tribe in the nation. A General Accounting Office study last year found 147 cigarette Web sites nationwide, and nearly half of them were based on Seneca territory.

    A federal crackdown on federal Internet sales would follow a New York State ban on the practice, which has been the subject of a lawsuit since it was passed in 2000. And it could come as the state approaches a March 1 deadline for beginning to collect taxes tied to transactions at brick-and-mortar Native American retailers.

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