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Bill would ban cigarette deliveries through U.S. mail

A bill will be introduced in the U.S. Senate next week to prohibit the U.S. Postal Service from delivering cigarettes through the mail, the latest attempt to cut off tax-free tobacco sales by Indian retailers.

"Passing this bill will be the final nail in the coffin for the sale of cigarettes on the Internet," said Sen. Charles E. Schumer, D-N.Y., the legislation's sponsor.

Similar measures have been tried and defeated, but the focus on the issue comes as New York officials continue to fight over whether the state should force the collection of taxes on cigarette sales by Indians to non-Indians.

A state law took effect March 1 requiring the state tax department to collect the taxes from wholesalers who supply the Indian retailers with tax-free cigarettes, but the tax agency is not enforcing the law because Gov. George E. Pataki is trying to get legislators to go along with his plan to delay its implementation for another year.

The Schumer legislation would impose fines of at least $1,000 per offense and jail time for repeat offenders who ship cigarettes through the mail. It also would give state attorneys general additional powers to prosecute violators.

"The Postal Service has become the delivery arm of a massive criminal enterprise shipping contraband cigarettes nationwide," said state Attorney General Eliot Spitzer, who joined Schumer at a news conference outside a main postal facility in Manhattan.

Postal Service officials said they had not seen the legislation and could not comment.

But Gerry McKiernan, a Postal Service spokesman, said the agency is abiding by federal law that dictates how mail is to be treated. "We are governed by federal statute, which says that if you put a stamp on it and you bring the package to us, we are required to deliver it. In the absence of a search warrant, we can't open it," he said.

McKiernan added that the agency last year sent out directives to its sales people saying they should not encourage or promote the Postal Service to cigarette shippers.

"So if you're a sales associate and you live 20 miles from an Indian reservation, we don't want you going over there saying 'Hey, we've got a deal for you,' " he said.

In addition, he said window clerks have been told that if they have reason to believe a package contains cigarettes, they should ask the customer if the appropriate taxes have been paid on the product.

But it's an honor system, he said, noting that the package is delivered if the customer states that taxes have been paid. "We have no reason not to believe them," he said.

The Postal Service has become the chief target of health groups and some officials trying to end tax-free cigarette sales by Indian tribes.

The dozens of Seneca tobacco companies have, according to their Web sites, turned to the Postal Service in the past year now that Federal Express, DHL and UPS have stopped accepting cigarette deliveries from them.

A number of credit card companies have also stopped processing orders for the tax-free cigarette sales.

Spitzer has been trying to put pressure on tobacco wholesalers, saying they risk prosecution if they didn't start on March 1 collecting the taxes on cigarettes they sell to Indian retailers, regardless of whether the tax department enforces the law.

The Seneca Indian Nation has insisted the sales are protected by treaties dating back nearly 200 years that granted sovereignty to the tribe.


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