NEW YORK—An undercover investigation has confirmed that shops on the Poospatuck Reservation on Long Island are illegally selling large amounts of untaxed cigarettes, announced Mayor Michael Bloomberg at City Hall on Thursday.
Together with Chief Policy Adviser John Feinblatt and Finance Commissioner David Frankel, Mayor Bloomberg showed an undercover video showing two shops on the Poospatuck reservation selling untaxed cigarettes for resale in New York City. The video was taken by an undercover department of finance officer and an undercover investigator.
According to the law, Native Americans are permitted to purchase untaxed cigarettes for personal use and for sale to other tribe members on the reservation only.
The video taken by the undercover officer shows the Poospatuck Smoke Shop owners openly selling 30 boxes of Newport cigarettes to an undercover officer, even after the officer said he wanted to resell them in Brooklyn.
“A law intended to protect the sovereignty of Native Americans has been exploited to fill the pockets of bootleggers and crooked cigarette dealers,” said Mayor Bloomberg. “Smoke shops in the Poospatuck Reservation continue to violate the law and sell untaxed cigarettes to bootleggers who openly state that they are buying them to resell in New York City.”
In 2008, New York City filed a complaint in federal district court against eight shops on the Poospatuck Reservation for selling untaxed cigarettes. In 2009, the court issued an injunction barring all sales of untaxed cigarettes to nontribal members.
“According to the U.S. Census Bureau, there were 296 people living in the Poospatuck reservation last year,” said Mayor Bloomberg. “Yet the reservation’s smoke shops have sold more than 4 million cartons of untaxed cigarettes so far this year. That works out to more the 523 packs a day for every man, woman and child living on the reservation.”
New York state’s tax on cigarettes is $4.35 a pack, and New York City tax is $1.00. The cigarettes transaction exposed by the undercover police were sold for $50 a carton, which is almost $6 less per pack.
“In 2009, sales of untaxed cigarettes on reservation accounted for one-third of all brand-name cigarettes sold [in New York City],” said the mayor. “That adds up to more than a billion dollars in lost tax revenue the city and state could have used during these times.”
Last year, New York Gov. David Paterson proposed a bill that would require all cigarette packs to have a tax stamp, eliminating the incentive of New York City shop owners to buy cigarettes on the reservation that don’t have a stamp.
Together with Chief Policy Adviser John Feinblatt and Finance Commissioner David Frankel, Mayor Bloomberg showed an undercover video showing two shops on the Poospatuck reservation selling untaxed cigarettes for resale in New York City. The video was taken by an undercover department of finance officer and an undercover investigator.
According to the law, Native Americans are permitted to purchase untaxed cigarettes for personal use and for sale to other tribe members on the reservation only.
The video taken by the undercover officer shows the Poospatuck Smoke Shop owners openly selling 30 boxes of Newport cigarettes to an undercover officer, even after the officer said he wanted to resell them in Brooklyn.
“A law intended to protect the sovereignty of Native Americans has been exploited to fill the pockets of bootleggers and crooked cigarette dealers,” said Mayor Bloomberg. “Smoke shops in the Poospatuck Reservation continue to violate the law and sell untaxed cigarettes to bootleggers who openly state that they are buying them to resell in New York City.”
In 2008, New York City filed a complaint in federal district court against eight shops on the Poospatuck Reservation for selling untaxed cigarettes. In 2009, the court issued an injunction barring all sales of untaxed cigarettes to nontribal members.
“According to the U.S. Census Bureau, there were 296 people living in the Poospatuck reservation last year,” said Mayor Bloomberg. “Yet the reservation’s smoke shops have sold more than 4 million cartons of untaxed cigarettes so far this year. That works out to more the 523 packs a day for every man, woman and child living on the reservation.”
New York state’s tax on cigarettes is $4.35 a pack, and New York City tax is $1.00. The cigarettes transaction exposed by the undercover police were sold for $50 a carton, which is almost $6 less per pack.
“In 2009, sales of untaxed cigarettes on reservation accounted for one-third of all brand-name cigarettes sold [in New York City],” said the mayor. “That adds up to more than a billion dollars in lost tax revenue the city and state could have used during these times.”
Last year, New York Gov. David Paterson proposed a bill that would require all cigarette packs to have a tax stamp, eliminating the incentive of New York City shop owners to buy cigarettes on the reservation that don’t have a stamp.
The last time New York attempted to collect taxes on cigarettes from Long Island reservations was in 1997. Tires were burned by protesters on the highway, shutting down a 30-mile stretch, according to Fox News.
