Tobacco.org

Federal Court Orders Long Island, N.Y. Tribal Smoke Shops to Stop Selling Untaxed Cigarettes to General Public  

In a major victory for public health and New York taxpayers, a federal judge in Brooklyn, N.Y. has ruled that cigarette selling businesses based on Indian tribal lands are not exempt from federal, state or New York City tax laws. Judge Carol Bagley Amon of the U.S. District Court for the Eastern District of New York has issued a preliminary injunction stopping smoke shops on the Poospatuck reservation on Long Island, N.Y from selling and distributing cheap, tax-free cigarettes to non-tribal customers. Judge Amon's ruling will not only increase New York City and State cigarette tax revenues but also, by collecting taxes and raising prices, directly reduce New York smoking rates and related harms and costs. . . .

Governor Patterson should follow Mayor Bloomberg's example and take more aggressive action to stop the sale and trafficking of tax-free cigarettes from tribal lands. Ideally, the Indian tribes will enter into mutually beneficial agreements with the state to collect and share all taxes owed on tobacco products sold on or from tribal lands. But if the tribes do not cooperate, Governor Patterson should take full advantage of existing law, as clarified in Judge Amon's ruling and other court decisions, to stop the illegal trafficking of tax-free cigarettes on tribal lands.

Other states and localities would do well to follow New York City's example and use all the existing laws that can be validly applied to stop illicit cigarette smuggling and tax evasion. Judge Amon's ruling proves that the federal Contraband Cigarette and Smokeless Tobacco Trafficking Act is an extremely effective new tool for state and local law enforcement. More state and local governments should consider using it to protect their tobacco tax revenues and improve public health.

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