Posts Tagged ‘PACT Act’

A roller coaster year in the courts for cigarette tax fights, Indian Country Today recaps the happenings and what it meant for Indian nations.

The “cigarette tax war” is one of ICT’s top stories of 2010.

Much of the turmoil took place in New York, where a law was passed by the legislature to ensure non-Indian residents who bought cigarettes bought on reservations were charged a state tax, to be collected from tribes that have already purchased the cigarettes. That fight is currently tied up in the courts on appeal.

    The law provides an onerous system whereby nations can opt into a coupon system to get a refund of the taxes they’ve already paid on tax-free cigarettes sold to Indians, or an allocation system in which a wholesaler can tie up a nation’s entire allocation of cigarettes even if the nation or individual retailers have not ordered stock for the wholesaler. . .

    So far, the nations have managed to stop the state from implementing its new tax collection scheme. On Dec. 9, a three-judge panel of the 2nd Circuit Court of Appeals rejected the state’s request to lift injunctions in place that stop the state from collecting cigarette taxes sold on Indian land while several challenges to the tax laws are pending. All of the pending lawsuits against the state have been consolidated into one case in front of the federal appeals court.

Also making waves was the federal Prevent All Cigarette Trafficking Act passed this year.

    The federal PACT Act – Prevent All Cigarette Trafficking Act – which had been bouncing from Congress to Congress in various incarnations for a number of years was signed into law by President Barack Obama in April.

    The new law bans the U.S. Postal Service from delivering cigarettes and certain other tobacco products – a move that will effectively extinguish the mail order tobacco trade run by the many business owners of the Seneca Nation of Indians and other Indian-owned tobacco businesses around the country.

Jenna Cederberg

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A protester positions himself along the I-90 thruway on the Cattaraugus Indian Reservation to protest the proposed New York state cigarette tax to non-Native American consumers in Irving, N.Y. (AP Photo/Don Heupel)

A protester positions himself along the I-90 thruway on the Cattaraugus Indian Reservation to protest the proposed New York state cigarette tax to non-Native American consumers in Irving, N.Y. (AP Photo/Don Heupel)

Even before yesterday’s shooting of a security guard outside a Native American-owned cigarette shop on Long Island, tensions were high over New York’s plan to collect taxes on cigarettes sold by Natives to non-Natives. Carolyn Thompson of the Associated Press explores the issue in depth:

 Diane Garrido holds a flag during a rally last week on the Cattaraugus Indian Reservation to protest the proposed New York state cigarette tax to non-Native American consumers in Irving, N.Y. (AP Photo/Don Heupel)

Diane Garrido holds a flag during a rally last week on the Cattaraugus Indian Reservation to protest the proposed New York state cigarette tax to non-Native American consumers in Irving, N.Y. (AP Photo/Don Heupel)

CATTARAUGUS INDIAN RESERVATION, N.Y. (AP) — As New York Indian Nation leaders battle in courtrooms to preserve their tax-free cigarette market, tensions are rising on reservations, where the state’s renewed efforts to tax sales to non-Native customers is viewed as yet another attack on Native American rights.

“For 200 years, we have been dealing with efforts to take our land, efforts to take our resources, efforts to take our jurisdiction,” said Robert Odawi Porter, senior policy adviser and counsel for the 7,800-member Seneca nation in western New York, which says its cigarette business is a $100 million-a-year industry.

Trustee Lance Gumbs from Long Island’s Shinnecock tribe called the tax “just another extension of … the genocidal tactics of New York state.”

“Every tribe is committed to fight this issue,” said Gumbs at his smoke shop in Southampton.

Nine New York tribes are in the cigarette business. The $4.35 sales tax would force them to raise their prices and blunt their competitive edge over off-reservation sellers. Tribal leaders say the income loss would devastate economies.

A rally last week alongside the New York state Thruway where it bisects the Senecas’ Cattaraugus reservation was organized as a peaceful “people’s rally.” But there were reminders of 1997 chaos that erupted the last time the state tried to tax reservation sales.

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Judge’s ruling halts Seneca Nation mail-order cigarette sales
A federal judge ruled Friday that Seneca Indians in the mail-order cigarette business can no longer use the post office to ship cigarettes while they fight a new ban on the practice, according to this Associated Press story. As the AP writes: “In a mixed decision, Judge Richard Arcara upheld the mail-order ban contained in the Prevent All Cigarette Trafficking Act but temporarily exempted more than 140 Seneca-owned businesses from a provision requiring them to comply with all taxing laws in the places they sell cigarettes.

Death of traditional singer in Glacier National Park prompts investigation
Authorities say Clinton Croff, 30, a well-known traditional Native American singer and dancer, died from from multiple wounds after becoming engaged in an altercation in Glacier National Park, according to this Associated Press report. Croff was from Browning, on the Blackfeet Indian Reservation in Montana.

First Nations women married to non-aboriginal men still fighting for rights

Aboriginal women on many First Nations reserves in Canada still are being denied their rights because they married non-tribal men, despite a 1985 law designed to address the issue. Canadian Press reports here about the legal struggle by some women who are even prevented from voting.

Turtle Island News publisher is about all-Native news, all the time

In the 16 years since Lynda Powless started the Turtle Island News on the Six Nations Reserve, she’s been arrested twice (at a band council meeting for refusing to leave), sued (unsuccessfully by then chief Roberta Jamieson) and lodged an Ontario Press Council complaint against another paper on the reserve after it ran a front-page story on Powless’s divorce, writes Denise Davy of the Hamilton Spectator. Powless tells Davy she started the paper because “people on the reserve had no clue what was going on in their own community.”

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There’s concern that recent vandalism on railroad tracks on the Cattaraugus Indian Reservation is tied to the recent — and controversial — decision to ban the sale of mail-order cigarettes, a key source of income for some tribal businesses.

A sign near the site of the vandalism site read “No Mail, No Rail,” presumably in reference to the new federal PACT (Prevent All Cigarette Trafficking) Act. (See previous post here.)

WIVB reports here that:

    The Seneca Nation of Indians confirms that railroad ties were purposely placed on CSX tracks a couple of hundred yards east of the Cattaraugus Creek railroad bridge, and that an Amtrak train sustained damage to its air lines when it struck the ties on Monday.

    Nation President Barry Snyder in a statement Friday says “This was an extremely irresponsible and dangerous act that could have resulted in harm to Amtrak passengers and crew members.”

No one was injured.

Tribes maintain the PACT Act constitutes a violation of tribal sovereignty.

Gwen Florio

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The new federal Prevent All Cigarette Trafficking (PACT) Act goes into effect today, but last night a federal court granted a temporary restraining order that allows a Seneca Nation mail-order cigarette retailer to to stay in business.

As Patrick Lakamp and Dan Herbeck of the Buffalo News report here:

    District Judge Richard J. Arcara granted the motion as part of the retailer’s lawsuit against the U.S. government. The retailer, Red Earth, which does business as Seneca Smokeshop, has asked the court to declare the Prevent All Cigarette Trafficking Act unconstitutional.

    Seneca Smokeshop, a 10-year-old business, employs 17 people and sells cigarettes in 46 states. It is owned by Aaron J. Pierce, a member of the Seneca Nation of Indians.

The PACT Act, signed by President Obama in March, bans shipping cigarettes, and also requires those selling them on the Internet to pay all taxes, including tribal taxes.

The restraining order – which applies only to the Seneca Smokeshop and Pierce – is in effect for 14 days.

Tribes have vigorously objected to the PACT Act, claiming it’s unconstitutional and a violation of tribal sovereignty. The PACT Act was supported by smoking foes – but also by big tobacco companies.

Gwen Florio

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When President Obama signed the PACT (Prevent All Cigarette Trafficking Act) last week, the Seneca Tribe – which derives an estimated $300 million annually from selling tax-free smokes through the mail – said it would mean the loss of hundreds of jobs, tribal and non-tribal. (See previous post here.)

Now, businesses around the reservation in New York state seem to be bearing that out, as Christopher Michel reports in the Olean Times Herald reports here:

    Last week, Synergy Business Management, a Seneca-owned mail-order cigarette business based in Salamanca, filed notice with the New York State Department of Labor it is planning to have companywide layoffs.

    “I expect we’ll have to eliminate a significant number of our 130 employees as a result of the P.A.C.T. Act,” Scott Maybee, owner of the company, said.

Michel talks to other, smaller companies that are equally fearful.

The Seneca Free Trade Association, an independent economic development group formed by the Seneca Nation of Indians, says the region supports about 150 Native-owned mail-order cigarette businesses.

“The Western New York economy is going to be devastated by the P.A.C.T. Act,” says Sally Snow, the group’s chairwoman. “… It’s not like 3,000 new jobs are going to come to Western New York anytime soon.”

Gwen Florio

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Then-presidential candidate Barack Obama was adopted into the Crow Tribe by Hartford and Mary Black Eagle during a campaign visit to Crow Agency. (James Woodcock/Billings Gazette?

Then-presidential candidate Barack Obama was adopted into the Crow Tribe by Hartford and Mary Black Eagle during a campaign visit to Crow Agency. (James Woodcock/Billings Gazette)


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The latest news release from the Seneca Nation – which is furious over a new law banning mail-order cigarettes – accuses President Barack Obama of “deliberate betrayal” of Native Americans.

Obama signed the PACT (Prevent All Cigarette Trafficking) Act yesterday. Read the Buffalo News account here.

The tribe derives significant income from mail-order sales tobacco products. The tribe says that will cause the loss of 3,000 jobs, both Native and non-Native, related to those sales.

But both health groups and big tobacco supported the PACT Act, the latter maintaining that the tax-free nature of the mail-order smokes represented unfair competition.

“The President of the United States invited Native American leaders to Washington D.C. in November and looked us in the eye as a sign of good faith in his pledge to protect federal treaties. Now four months later he has betrayed that promise,” says Seneca Nation president Barry Snyder Jr.

The news release reminds readers that, during his campaign, Obama was adopted into the Crow Tribe, in southern Montana. His adoption by Hartford “Sonny” Black Eagle and Mary Black Eagle made him a member of the Whistling Water Clan, a child of the Newly Made Lodge, and brother to Cedric Black Eagle, now the tribe’s president

“I guess he’s forgotten friends he made when he wanted votes. He is no friend to Indian Country and I would hope the Crow revoke his honorary member status,” Snyder says.

Snyder also blasted members of Congress who voted for the PACT Act, but singled out South Dakota Democratic Rep. Stephanie Herseth Sandlin for praise for refusing to support it.

“Congresswoman Sandlin, whose district includes Rosebud and Yankton Sioux nations, had the backbone to point out that the PACT Act will open the door for states to bring felony changes against tribes and tribal businesses. If only our Western New York lawmakers had this same respect for tribal sovereignty,” Snyder says.

Gwen Florio

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Seneca Nation President Barry E. Snyder Sr. has sent a letter to President Barack Obama seeking a veto of the PACT (Prevent All Cigarette Trafficking) Act.

“If signed into law, the PACT Act will seriously impact the Seneca Nation and the Seneca people,” Snyder writes. “We will be subject to racial profiling for the simple act of mailing a package. We will lose thousands of jobs and important health care support. And most damaging, we will be set back in our journey to self-determination by the very treaty partner that pledged to support and protect us.”

Snyder reminds the president that the bill to ban mail-order cigarettes – which the Seneca Nation contends will cost 1,000 Native and non-Native jobs – was developed without significant consultation with Indian nations, according to this PR Newswire account:

    Snyder’s letter comes a day after the U.S. House of Representatives approved the PACT Act, which would prohibit the mailing of tobacco products. The measure, which has been promoted as an anti-smoking tool, especially among minors, will result in the loss of some 3,000 Western New York jobs tied directly and indirectly to the Native American tobacco economy.

    In his letter, Snyder also reminded Obama that the bill is in conflict with the U.S. president’s promise to improve relationships between the White House and Native Americans. Obama met with Snyder and other Native American leaders last fall as part of that pledge.

And, he writes, “When I heard you say this at the meeting of tribal leaders in November, I took your word that you would follow through.”

Ouch.

Gwen Florio

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So says Seneca Nation President Barry Snyder Sr., in this Associated Press story about the recent vote by Congress to ban mail-order cigarettes.

Both the House and Senate have now passed PACT (Prevent All Cigarette Trafficking) Act, which goes to President Obama for his signature. He’s expected to sign it today, according to a morning report by NPR.

“This is a sucker punch to our federal treaty rights,” Snyder says. “This is a direct assault on our economy and our people. And it will have a devastating ripple effect on the Western New York economy.”

Tribes say the ban will affect 1,000 jobs – held by both Native and non-Native people:

    While numerous tribes sell tobacco products around the country, the Senecas have the most at stake, with dozens of Web sites offering cigarettes at discount prices unaffected by state’s $2.75-per-pack excise tax and 4 percent sales tax.
    The post office has been the primary means of delivery since UPS, DHL and FedEx agreed with the New York Attorney General several years ago not to ship cigarettes nationwide.

    The western New York tribe’s tobacco business accounts for about half of its $1.1 billion economy, said Snyder, who said tribes around the country and the National Congress of American Indians had rallied in support of the Senecas against the bill.

New York state, and now Congress, have eyed taxes on tribal smoke shops and tribally produced cigarettes as a way to refill tax coffers drained by the recession. Rep. Anthony Weiner, D-N.Y., who sponsored the PACT Act, along with Rep. Lamar Smith, R-Texas, said New York alone loses as much as $1 billion a year from cigarette tax evasion, according to the AP.

Gwen Florio

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More than 1,000 jobs, held by Native Americans and non-Natives alike, will be lost as a result of the PACT (Prevent All Cigarette Trafficking) Act approved yesterday by the U.S. Senate, according to Seneca Nation President Barry E. Snyder Sr.

The PACT Act would limit distribution of cigarettes manufactured and sold by tribes by banning mail-order cigarette sales. Its proponents say it would cut down on cigarette smuggling, which hurts states by denying them tax revenue from cigarette sales. (For background, see video above.)

“The PACT Act is being portrayed as a tool to fight cigarette smuggling. In reality, it is about big tobacco protecting market share. This action will result in the death of legitimate, treaty-sanctioned Native American commerce, causing significant economic harm, Snyder says, in this story from the Buffalo (N.Y.) Evening Observer:

    “We will not back down. We will pursue an aggressive campaign of outreach and education to inform the voters of Western New York which political leaders stand with the Seneca Nation and those who don’t.”

    The Seneca Nation maintains the measure, which has attracted strong support and lobbying efforts from mainstream tobacco corporations, led by Philip Morris, said it is an overt attempt by big cigarette corporations to simply stomp out any market competition.

The Buffalo News reports here that the House is expected to quickly approve the Senate version of the bill.

Gwen Florio

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