HARLESTOWN, R.I., Sept. 23 — The sign on the tan box of a building on the Indian reservation here still says Narragansett Smoke Shop, and lashed to a tree out front is a sales pitch for Salem cigarettes at $31.99 a carton.Posted on 09/27/2003 3:27:06 PM PDT by sarcasm
HARLESTOWN, R.I., Sept. 23 — The sign on the tan box of a building on the Indian reservation here still says Narragansett Smoke Shop, and lashed to a tree out front is a sales pitch for Salem cigarettes at $31.99 a carton.
But inside, the place has been transformed into the Narragansett Sovereignty Protection Headquarters. The only items for sale are two kinds of T-shirts: one proclaiming "Sovereignty" and the other with the slogan "Homeland Security. Fighting terrorism since 1492. In support of the Narragansett Tribe, July 14, 2003."
That was the date the Rhode Island State Police raided the smoke shop in a dispute over the Indians' insistence on selling tax-free cigarettes. The raid erupted into a scuffle between state troopers and tribal members, leaving eight people with minor injuries. Eight Indians were arrested, including the tribe's leader.
The raid was an unusually pointed way to handle an issue that many states are facing, the refusal by Indian tribes to collect sales taxes on cigarettes and gasoline. Now Rhode Island and the Narragansetts are battling in court over whether the state has the right to collect those taxes or to send in police officers to enforce state law on Indian land.
State governments say tribal tax-free sales, in stores and on the Internet, deprive them of millions of dollars. Those losses have grown as financially struggling states raise cigarette taxes, driving some smokers to tribal stores. And with the deficit among the states projected to reach more than $50 billion in the next fiscal year, legislators and governors are increasingly trying to collect taxes from Indian businesses.
In New York, after a long history of sparring with tribes over taxes, the state won a victory in 1994 when the Supreme Court backed its right to collect taxes on sales to non-Indian consumers. But New York has never collected the taxes, and in 1997, under Gov. George E. Pataki, the state stopped trying after several tribes protested vehemently and blocked the New York State Thruway.
Now New York is poised to try to collect the tax, which officials say would bring in at least $64 million a year. The Legislature has ordered the Department of Taxation and Finance to draw up new regulations, with the intent of collecting taxes starting Dec. 1. Indians say they will resist and have threatened to sue.
In Maine, Gov. John Baldacci wants to prevent the Aroostook Band of Micmacs from opening tax-free tobacco shops. The Idaho legislature has been trying since January to collect tribal cigarette taxes.
"There's quite a few states that are very furious about this tax issue," said Robert J. Miller, an associate professor at Lewis and Clark Law School in Portland, Ore.
The Supreme Court has ruled that states can collect taxes on tribal cigarette sales to non-Indians and to members of other tribes, said Robert N. Clinton, a law professor at Arizona State University. But because tribes are also sovereign entities, states cannot sue them if they fail to pay taxes, effectively neutering states' ability to enforce the tax law.
"The tax in the abstract may be lawful, but all the accouterments including the ability to sue the taxpayer are not in place," Professor Clinton said. "The tribes are immune from state enforcement."
For the states, Professor Miller said, "this is what you call a right without a remedy." And because the states have no enforcement power, he said, many tribes have been opening tax-free businesses.
Several states have handled the issue by arranging compacts with tribes. In Washington State, under a 2001 agreement, tribes must collect taxes from non-Indian consumers but can keep the tax revenue, a deal that generates money for the tribe and also helps the state by undercutting the tribal businesses' competitive edge over non-Indian retailers.
In Oklahoma, tribes give the state a percentage of the taxes they collect. New York intends to follow a different model, collecting the taxes from wholesalers who sell cigarettes to the tribes; the wholesalers could then pass on the tax in the price they charge Indian smoke shops.
In Rhode Island, the situation has been complicated by an unusual law concerning the relationship between the state and the Narragansett tribe.
For a decade, the state of Rhode Island and the 2,600-member tribe have feuded over the Narragansetts' desire to build a casino on its reservation, in the southwest part of the state.
In May, facing yet another governor's opposition to the casino, the tribe said it would open a smoke shop. Because the shop would not charge consumers the state cigarette tax, which recently increased to $1.71 from $1.32 per pack, it would cost the government $10 million to $12 million annually, state officials say.
Tribal leaders agreed to delay the opening after Gov. Donald L. Carcieri visited the reservation, becoming the first governor in decades to do so, and offered to help the tribe find other ways to lower its high rates of unemployment and poverty. But the tribe's leader, Chief Sachem Matthew Thomas, said the proposals, which included a water-bottling plant and an assisted-living facility, would not generate the revenue of a casino or a smoke shop.
"They weren't really advantageous to the tribe," Chief Thomas said. "They were creating jobs, but it's not self-sufficiency."
On July 12, the tribe opened the smoke shop along a rural road dotted with trailer homes. State officials met with tribal leaders and asked them to close it. Chief Thomas said the tribe offered to discuss a compact, but only if Mr. Carcieri would no longer block a tribal casino.
Calling that condition "outrageous," the governor ordered state police to the smoke shop to execute a search warrant. Tribal members, including Chief Thomas, tried to block them from entering.
"Everything was out of control," said Bella Noka, the tribe's youth director, who was arrested on disorderly conduct charges, along with her husband, teenage son and daughter. "It was ugly, and it was only over cigarettes."
Now, the tribe and the state are in federal district court in Providence, their dispute centering on a 1978 federal law, the Rhode Island Settlement Act. The act granted the Narragansetts 1,800 acres for their reservation, but unlike laws that apply to tribes in other states, it also made the tribe subject to the state's criminal and civil laws and any income-producing activities on tribal land subject to state tax.
"They can't willy-nilly say `I'm going to start selling cigarettes without taxes,' " Rhode Island's attorney general, Patrick C. Lynch, said in an interview. "They should be treated no differently than the mom and dad who run the store down the street or a Cumberland Farms convenience store."
The Indians say the act gave the state authority only over the land, not the Indians themselves. And in any case, they say, the act applied to the Narragansetts only before they were a federally recognized tribe, a status granted five years after the act was passed.
"Here's where the state, I think, takes their eye off the ball," Chief Thomas said. "In 1983, when we became recognized, the relationship with the state dissolved."
Several experts on Indian law said courts had previously ruled that the settlement act did make the tribe subject to Rhode Island laws. But they said it might be harder for the state to justify the raid.
Professor Miller of Lewis and Clark Law School said it was comparable to Rhode Island sending state troopers to shut down a business in Connecticut.
"A tribe is a government too," he said. "You don't send your police across the border."
That finding could leave Rhode Island in the position of so many other states: legally entitled to tax tribal cigarette sales, but legally unable to compel those taxes to be paid.
White man speak with forked tongue!
So can the tribes reduce their prices by the tax amount, given that the tax isn't really a tax?
The Indians light tires in the middle of the thruway, blocked traffic for days. The state Police had to come in and things were really going to get nasty, then Pataki called it off.
Now New York is poised to try to collect the tax, which officials say would bring in at least $64 million a year. The Legislature has ordered the Department of Taxation and Finance to draw up new regulations, with the intent of collecting taxes starting Dec. 1. Indians say they will resist and have threatened to sue.
They will start all over again too! This time things will get much worse, citizens are ready willing and able to join in on it, I'll be there to show my support.
all to typical of demonrats, no cuts just search for more and more ways to get revenues. They all $uck!
With surface-to-air missiles, anti-tank weaponry and with nuclear bombs, radical Indians can acheive the Aztlan they deserve.
But that was long ago. What could possibly owed to them now? (sarc)
They are subject to federal regulations and not subject to the states. This was in the treaties that a lot of them signed IIRC.
They are about on par with the District of Columbia in terms of status. Not states, not territories, but they do get to vote in state elections ... oddly enough.
Not subject to the States, but get to vote in State Elections? That makes ZERO sense in my mind. Ther must be more to this.
Pardon me?????????
deprive them??????>
those losses???????
It's not the GOVERNMENT'S money - it's MINE...........when in heaven's name are they finally going to wake up and get this through their thick skulls????????
</rhetorical rant>
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