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Should Tribal Cigarettes Be Tax-Free?

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Elected officials, cigarette manufacturers and tribal members meet at Manhattan Community College Tuesday to discuss whether or not taxes should be collected on the 28 million cartons of untaxed cigarettes sold by Native American tribes in New York.

Senator Craig M. Johnson of Nassau County called the hearing to find out why the tribes weren't taxing their cigarettes since that revenue was included in the state budget.

"The failure to secure this badly needed revenue continues as other states - most recently Florida - have been able to reach tax collection agreements with their local Native American nations," Johnson told The Post-Journal. "This committee wants to be helpful in crafting a solution to this problem, but first we - and the public - need to be appraised of where the state and the nations stand."

New York's Native American tribes say city and state authorities can not require them to tax the cigarettes they sell since the tribes have federal treaties that permit free trade and commerce on their reservations.

The Post-Journal reports the Seneca Nation of Indians, which has 7,200 enrolled members living in New York, will testify to that at Tuesday's hearing. The Seneca Nation also will read into the record that cigarette sales generate $71 million in economic benefits for state communities.

Governor David Paterson is in favor of taxing the tribe's cigarettes, saying the taxes could drive in $400 million in much-needed annual revenue, The Associated Press reports. Paterson is trying to balance a $3 billion state budget deficit. Arts and education funding are currently on the chopping block.

Cigarette manufacturers are also in favor of the taxation, saying it would limit illegal sales and keep cigarettes out of the hands of minors.

"If we had enforcement of the laws on the books, that would go a long way," David Sutton, spokesman for the Richmond, Virginia-based Altria Group Inc., parent company of Philip Morris USA, told The Post Journal.

Anti-cigarette advocates agreed.

"The failure to collect the tax is a major public health problem," said Russ Sciandra, of the Center for a Tobacco Free New York. "There are thousands of people who would quit smoking if they had to pay the full price."

Today's hearing at 199 Chambers will be held from 10:30 AM to 2:30 PM.