Smoking just got more expensive for New Yorkers. As part of the 2010-2011 budget, New York State increased taxes on cigarettes and other tobacco products and planned to enforce collection on Indian reservations.
New York Has Nation's Highest Cigarette Tax
As of July 1, 2010, New Yorkers will pay the highest cigarette tax in the country when the tax increases from $2.75 per pack to $4.35 per pack. In New York City, which levies its own taxes, the total combined state and local tax on cigarettes increased to $5.85 per pack. According to the New York Post, this pushed the price for one pack of cigarettes up to $14.50 at some New York City stores.
Higher Taxes on Other Tobacco Products
Effective August 1, 2010, the tax on smokeless tobacco sold in New York will more than double, jumping to $2 per ounce. The state tax on cigars, pipe tobacco, and other kinds of tobacco will rise from 46% to 75% of the wholesale price. The budget bill also stipulated that “little cigars” would be taxed at the same rate as cigarettes.
Taxing Purchases on Tribal Land
This has become more than just a pain in the butt for smokers. The budget includes provisions that require Native American tribes to collect cigarette taxes from “non-Indian” consumers, which has reignited an old conflict between the state of New York and Native American nations. In the nineties when the state tried to enforce cigarette tax collection by tribes, protesters blocked roads and bridges that went through reservations, leading to physical confrontations between the police and tribal members. Tribal leaders worry that collecting cigarette taxes will cause smoke shops to shut down, harming their economy and resulting in job losses for tribal members.
Seneca Nation President Barry E. Snyder Sr. spoke about the treaties the tribe has with the federal government saying, “This means that no other government has the right to interfere in how we use our lands without our consent. It is for this reason that New York State has no authority over us, our lands, or the commerce taking place on our lands. We have fought hard to recover from the dispossession of our traditional economy due to the loss of our lands over 200 years ago. We will not be the state’s tax collectors and we will defend our freedom regardless of the cost.”
New York Governor Patterson’s spokesman had this to say: "The governor will pursue a policy that respects the sovereignty of Indian nations while ensuring the collection of taxes from those who rightly owe them.”
The state plans to begin trying to collect cigarette taxes from Native American tribes beginning September 1, 2010. J.C. Seneca, a member of the Seneca Nation tribal council, called this "an act of war."
Update: The Seneca Nation of Indians and the Cayuga Indian Nation of New York have received a federal temporary restraining order and a preliminary injunction that temporarily relieves them from implementing, administering, or enforcing these cigarette taxes.
Sources: Associated Press, Indian Country Today, New York State Division of the Budget