Townsend to Gov: ‘Threat Assessment’ a Smoke Screen on Tax Issue

Assemblyman David Townsend (R,WF-Sylvan Beach) sent a letter to the office of Governor David Paterson denouncing what he called another stalling tactic in the years-long struggle to collect millions of dollars in back sales taxes on cigarettes sold to non-Indians on New York State reservation land, despite a straightforward solution already in place.

The letter referenced a correspondence the governor had with the U.S. Justice Department dated September 23 seeking a “threat assessment” regarding possible mass violence if the state Department of Taxation and Finance were to attempt collection of the estimated $600 million owed to New York taxpayers annually in cigarette sales taxes, a law endorsed by the governor and upheld by state and federal courts. The failure to properly and consistently enforce tax law in New York has also led to an uneven playing field in which non-tribal convenience stores and filling stations face state sales and excise taxes on their products while their competitors do not.

“Everyone agrees that the desperate state of New York’s finances demands action,” said Townsend. “Everyone, it seems, except David Paterson. In calling on the federal government to gauge the ‘likelihood of violence and civil unrest,’ in the event of recouping the millions of dollars our state is owed, the governor is both delaying in fulfilling his obligation to legislation he signed into law in December 2008, and ascribing violent tendencies to a whole class of people he has never met.

As I told Governor Paterson in my letter, the mechanism for collecting these taxes exists. For Native American smoke shops to obtain cigarettes, they must purchase them from a wholesaler. The state can simply require the wholesalers to collect the sales tax from Native American tribes for their smoke shops before the items are delivered. Rather than stalling on the collection of this sales tax, I urged him to direct the Department of Taxation and Finance to begin the collection from cigarette wholesalers and resolve New York’s tax inequity forever. Paterson’s ‘Smokes Rebellion’ bogeyman has little to do with our safety; it’s another delaying tactic from a governor determined to do nothing, at taxpayers’ cost.”

Townsend to Gov: ‘Threat Assessment’ a Smoke Screen on Tax Issue

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