Federal Court Orders Long Island, N.Y. Tribal Smoke Shops to Stop Selling Untaxed...

Federal Court Orders Long Island, N.Y. Tribal Smoke Shops to Stop Selling
Untaxed Cigarettes to General Public

WASHINGTON, Aug. 27 /PRNewswire-USNewswire/ -- The following is a statement by
Matthew L. Myers, president of the Campaign for Tobacco-Free Kids:

(Logo: http://www.newscom.com/cgi-bin/prnh/20080918/CFTFKLOGO)

In a major victory for public health and New York taxpayers, a federal judge
in Brooklyn, N.Y. has ruled that cigarette selling businesses based on Indian
tribal lands are not exempt from federal, state or New York City tax laws.
Judge Carol Bagley Amon of the U.S. District Court for the Eastern District of
New York has issued a preliminary injunction stopping smoke shops on the
Poospatuck reservation on Long Island, N.Y. from selling and distributing
cheap, tax-free cigarettes to non-tribal customers. Judge Amon's ruling will
not only increase New York City and State cigarette tax revenues but also, by
collecting taxes and raising prices, directly reduce New York smoking rates
and related harms and costs.

The ruling came as a result of a federal lawsuit filed by the City of New York
and New York mayor Michael Bloomberg claiming that the city and state had lost
$840 million in tax revenue as the result of illegal cigarette sales and
trafficking by the smoke shops on the Poospatuck reservation. Judge Amon
ordered that tax-free cigarettes could be sold by the smoke shops only to
members of the Unkechaug tribe, which controls the reservation, and not to the
general public.

This lawsuit is the first instance of a state or locality successfully using
the federal Contraband Cigarette and Smokeless Tobacco Trafficking Act, which
was amended in 2006 to allow for state and local enforcement to stop
tax-evading cigarette sales and deliveries. Judge Amon's ruling shows that
states and localities can effectively stop tax-evading sales of tobacco
products on or from tribal lands, while fully respecting tribal sovereignty
rights, simply by taking full advantage of available laws and legal
procedures.

Mayor Bloomberg's successful efforts to stop illegal tobacco sales from tribal
lands in New York stand in sharp contrast to the lack of effective action by
New York State Governor David Patterson. Laws are already on the books that
give the state government broad authority to collect taxes on cigarettes sold
on tribal lands, while fully honoring tribal sovereignty and immunity rights.
Governor Patterson's reluctance to implement or effectively enforce these laws
is depriving the state of hundreds of millions of dollars in needed tax
revenue. At the same time, the sale of cigarettes at low, tax-free prices
directly increases overall smoking rates and smoking-caused harms and costs
throughout New York State.

Governor Patterson should follow Mayor Bloomberg's example and take more
aggressive action to stop the sale and trafficking of tax-free cigarettes from
tribal lands. Ideally, the Indian tribes will enter into mutually beneficial
agreements with the state to collect and share all taxes owed on tobacco
products sold on or from tribal lands. But if the tribes do not cooperate,
Governor Patterson should take full advantage of existing law, as clarified in
Judge Amon's ruling and other court decisions, to stop the illegal trafficking
of tax-free cigarettes on tribal lands.

Other states and localities would do well to follow New York City's example
and use all the existing laws that can be validly applied to stop illicit
cigarette smuggling and tax evasion. Judge Amon's ruling proves that the
federal Contraband Cigarette and Smokeless Tobacco Trafficking Act is an
extremely effective new tool for state and local law enforcement. More state
and local governments should consider using it to protect their tobacco tax
revenues and improve public health.

SOURCE Campaign for Tobacco-Free Kids

Joel Spivak of the Campaign for Tobacco-Free Kids, +1-202-296-5469