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Indians see tax battle with Spitzer

A resumption of cigarette deliveries to Native American smoke shops does not mean business as usual so long as State Attorney General Eliot Spitzer remains a candidate for governor.

Seneca leaders and a Tuscarora businessman predict they are headed for a confrontation with Spitzer, who has strongly advocated collecting cigarette taxes on the reservations at the direction of the State Legislature.

"It ain't over yet with Spitzer. He's brought us together," said Cyrus M. Schindler Jr., a tribal councilor and member of a Seneca committee studying ways to thwart the state's recent effort to collect taxes on Indian-sold tobacco.

Joseph "Smokin' Joe" Anderson, a smoke shop owner on the Tuscarora Reservation in Niagara County, said his lawyers are working the tax issue. "This is what I say to the government:

Don't step on our rights," Anderson said. "They've burned us out and put us on reservations. We came up with ways to manufacture and sell goods, and now they want to take that away from us. It's not going to happen."

Many Seneca leaders remain angry with Spitzer's statement earlier last week, describing nation retailers shipping cigarettes over the Internet as a "massive criminal enterprise."

Some say they are looking at ways to spend as much as $5 million to make their anti-tax case to the public during the gubernatorial campaign in the hopes of damaging Spitzer's chance at election.

One way to raise that money might be to raise the price of a carton of cigarettes and use that extra money for an anti-Spitzer campaign fund.

The state Tax Department on Friday appeared to back down from a law that passed both the Senate and Assembly, requiring state taxes be charged on cigarettes sold from the reservation. The Tax Department notified a major wholesaler of cigarettes that it could ignore the law, and tobacco shipments resumed Friday.

Seneca businessmen and leaders aren't certain that the conflict is over, though, and they are discussing other strategies. One is the possibility of the Seneca Nation buying cigarettes directly from tobacco manufacturers, said Anna Ward, who runs Big Indian, one of the Senecas' largest retail operations.

"That would strengthen our commerce," said Ward, Schindler's daughter. "The Seneca Nation might also deal with other Indian nations that have direct relationships with cigarette manufacturers."

Schindler, who negotiated a casino compact with Republican Gov. George E. Pataki, described Spitzer's efforts to collect taxes from American Indians as a "bullying tactic" that goes against a promise made by Pataki when he agreed to allow Indian-run casinos in New York State.

"When we were negotiating the [casino] compact, Pataki said we were sovereign and he wouldn't collect taxes from us," Schindler said, adding that treaties between the tribe and the federal government protect the nation from taxes.

The U.S. Supreme Court, however, ruled in 1994 that the state could collect taxes on sales of cigarettes to non-Indians.

Native Americans on the Tuscarora Reservation, though, still feel the tax issue is one of sovereignty. "How are they going to enforce that?" Anderson asked. "Are non-Indians going to have stars on their foreheads? This is not about taxes or politics, it's about human rights."

Billie Twogun, who lives on Tuscarora land, said it reminds him of the Deep South in the 1950s. "They want us to have a native price and a white-boy price," he said.

Jim Printup, who works at Jay's Place, an Indian smoke shop on Walmore Road on the Tuscarora Reservation, also expressed resentment at the effort to collect the taxes on the reservation. "How can you tax another nation?" he said. "This is never going to fly."

"We plan to be in the tobacco business for another 100 years," said Anderson, who owns cigarette, gasoline, gift shop and food market complexes on the reservation.

Schindler hinted he and other Senecas are not afraid to return to the tactics of the 1990s, when angry Senecas and their supporters closed down the New York State Thruway with massive protests and fires in response to the state's effort to collect taxes.

e-mail: lmichel@buffnews.com

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