PATAKI SUED TO ENFORCE NEW LAW ON TAXATION OF NATIVE AMERICAN SALES TO NON-NATIVE AMERICANS

        The state’s convenience store industry has taken legal action to force Governor Pataki to uphold a new law by collecting taxes on Native American sales to nonnative Americans. The explicit new law strengthens the group’s fight with the Pataki administration over fair taxation of cigarettes and gasoline.

   Failure to enforce the law costs taxpayers at least $450 million annually in lost tax revenue (about $1.2 million a day) and deprives licensed businesses of $1billion a year in retail sales.

The lawsuit filed in State Supreme Court in Albany seeks a court order to enforce a March 1 law (Sections 471e and 284e

of the Tax Law) requiring collection of state sales and excise taxes on the vast quantities of cigarettes and motor fuel sold by Native American stores to nonnative Americans. The lawsuit

also seeks to ban wholesalers from delivering untaxed cigarettes to Native American tribal stores.

“Governor Pataki’s refusal to uphold his constitutional duties to enforce the law to collect these taxes is hurting taxpayers and small businesses alike,” said James Calvin, President of the New York Association of Convenience Stores, the lead plaintiff.

The plaintiffs are NYACS, Canastota based Nice N Easy Grocery Shoppes, and East Amherstbased MWS Enterprises Inc. They are represented by the Scott Group PLLC and Kelley Drye & Warren LLP.  Other defendants named are wholesale distributors known or believed to be supplying tribes with untaxed cigarettes, including Day Wholesale Inc. of Tupper Lake; Milhelm Attea & Bros. of Buffalo; Gutlove & Shirvint of Long Island City; Mauro Pennisi of Lindenhurst; and Frank Colucci Inc. of Niagara Falls.

“Native American tribes have every right to conduct business, as do their suppliers,” said Calvin, “but everyone in the supply chain should be required to play by the same rules.” v