Tobacco tax boost tied to Indian issue
By Tom Precious
Updated: January 27, 2010, 7:12 am / 10 comments

ALBANY — A legislative push would deny Gov. David A. Paterson his $1-per-pack cigarette tax increase until the state begins collecting taxes on tobacco products sold on American Indian reservations.

The governor included the cigarette tax increase in his proposed budget. But when the governor’s call to start collecting the taxes on such sales to non-Indians would kick in remains unclear, although it likely would be months after the proposed tobacco tax increase takes effect June 2.

“We should collect before we tax,” State Sen. Carl Kruger, chairman of the Senate Finance Committee, said Tuesday at a legislative hearing looking into ways to end the tax-free sales.

“Everyday that goes by we are not doing the right thing for the people of New York,” said Kruger, a Brooklyn Democrat who called the long-standing tax-free sales a “diabolical scheme” that has denied the state billions of dollars in tax revenue.