Levy supports stopping the sale of tax-free cigarettes

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Suffolk County Executive Steve Levy will sign a bill providing for Suffolk County to take legal action to stop smoke shops at the Poospatuck Reservation in Mastic from selling cigarettes tax-free to non-tribal members.

The measure was passed by the legislature last week, despite a plea by Harry Wallace, chief of the Unkechaug Nation, who told the lawmakers that they “will not collect or impose any tax revenue on our land without our consent” because the reservation constitutes a “sovereign nation.” He said that only a political solution can resolve “this dilemma.”

But on Monday, Mr. Levy said there is a statewide problem in the untaxed sale of cigarettes by reservations and “nobody is saying that Indians on reservations should be paying taxes for cigarettes for their own use, but if they are engaging in outside commerce, they should.” Mr. Levy said that in New York State “hundreds of millions of dollars are lost every year on unpaid taxes on cigarettes, taxes that would go to pay for health clinics and bus routes.” Moreover, said the county executive, this sale of cigarettes to non-trial members sets up a “phenomenal competitive disadvantage” for the non-Indian businesses selling cigarettes.

The measure was authored by Legislator Lou D’Amaro of Huntington who has made a similar argument and also said at last week’s legislative session that selling cigarettes “so cheap is hurting [the county’s] smoking cessation efforts.”

The D’Amaro bill says that the sale of “massive quantities of cigarettes to the general public by the smoke shops without the imposition of the county sales tax costs Suffolk County taxpayers millions of dollars in lost revenue.”

Under the measure, Suffolk County would “institute, or intervene in, any and all legal actions in any judicial and/or administrative forum to recover” sales tax from the smoke shops. The county, Mr. D’Amaro has said, could either join in the lawsuit brought recently by New York City against the Poospatuck smoke shops or bring its own lawsuit.

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