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Internet
cigarette sales tax bill goes before House
WASHINGTON
- Tribal sovereignty got all of 30 seconds at an Oct. 2 hearing on a tax
bill that could undermine more than 200 years of precedent, according to
Native organizations in the nation’s capitol. dute
free cigarettes
H.R.
2824 in the House of Representatives is an attempt to bring state taxation
powers up to speed with Internet commerce - in the words of one
congressman, "to put teeth into the Jenkins Act," a 1949 federal law that
requires the sale and shipment of tobacco products to be reported, by the
seller, to the purchaser’s state tobacco administrator. "Compliance with
this federal law by cigarette sellers enables states to collect cigarette
excise taxes from consumers," the General Accounting Office states. States
now have no way of forcing compliance with the Jenkins Act, a situation
two bills now in Congress aim to change. marlboro
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With
the advent of the Internet, many online cigarette vendors have not
bothered to report on the sale and shipment of tobacco products. And many
consumers have turned to the Internet as a source of tax-free tobacco
products. Cigarettes
Store This has led to the elaboration of state
taxation systems that would demand taxes on tobacco products be paid prior
to their delivery to vendors. Internet vendors would then pass the taxes
on to consumers in their pricing decisions, just as non-Internet vendors
do now; but they do so after cheap
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the point of sale. cheap
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This
is the crux of it for tribal sovereignty. The buy
cigarettes Constitution and court precedent forbids
state exercise of regulatory authority on reservations, including
authority to levy taxes. In more than one instance, states have gotten
around this by embargoing reservations, in effect - that is, by
intercepting trucks using dute
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reservations for sale there. States have feared in these cases that taxes
dues on goods sold marlboro
cigarettes on-reservation to non-Indians - and
therefore, arguably at least, eligible for collection by the state - would
never be collectible. Far more frequent are tribe-state tax compacts,
freely entered into by both parties that tend to minimize both
confrontation and litigation.
But
in most such instances, taxation is still at the point of sale. Tribal
organizations argue that a federal delegation of authority to states for
collecting taxes from reservation-based vendors prior to any cheap
cigarettes discount sale amounts to a back-door
abrogation of tribal sovereignty.
"We
suffer from generalization," said Tim Martin, executive director of United
South and Eastern Tribes. Congress typically sweeps up tribes in
legislation aimed at states, he explained. "That’s what we work on most."
Congress would be better off giving separate consideration to tribal
issues discount
cigarettes due to the unique legal status of tribes, he
added.
A
"paid prior" system that is set forth in H.R. 2824 and its buy
cigarettes companion bill in the Senate, S. 1177.
At
the Oct. 2 hearing of the House Judiciary Committee dute
free cigarettes Subcomitttee on Courts, the
Internet and Intellectual cigarettes
Property, Rep. Mark Green, R-Wis., characterized H.R. 2824 as "a new
enforcement tool so that states can enforce laws that are already on the
books" - online
cigarettes a reference to the Jenkins Act. cigarettes
Howard
Berman, D-Calif., said he intends to vote for the bill but asked to know
"how the issue of tribal sovereignty plays into these
questions."
"Tribes
are already covered by the Jenkins Act," Green replied. cigarettes
online
Green
and Marty Meehan, D-Mass., then engaged in a brief exchange that suggested
tribal sensitivities would be considered as the bill moves along, with
Meehan disavowing any attempt "to treat tribes any differently than anyone
else."
Tobacco
is not the only product that consumers purchase tax-free on the Internet,
nor is the Internet the only venue for tax-free sales. The National
Association of Counties estimates that states, counties and cities will
lose $26 billion this year from uncollected sales taxes on catalog and
Internet sales. marlboro
cigarettes
But
many online cigarette vendors are located on reservations. cigarettes
Few
tribal governments have developed tobacco and/or tax codes. Those that
have tried have encountered strong resistance from tribal communities.
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cigarettes
Into
this regulatory void, states are now dute
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singular malevolence toward tribes, but certainly with an eye on two
larger prizes. One is increasing tax revenues for states. Between 1993 and
2001, according to Colorado Governor Bill Owens, state spending increased
at twice the rate of federal spending. Now that those economic boom times
have turned to hard times nationally, many states face ruinous budget
deficits. According to the National Association of Counties, three of four
counties nationwide are experiencing revenue shortfalls even as 95 percent
face a rising demand for services. "Some of our challenge is of our own
making," Owens said (in tax-related testimony before the House that did
not concern H.R. 2824). Cigarettes
Store
The other larger prize for lawmakers is enhanced
competitiveness for powerful constituents on the state side of reservation
borders. The National Association of Convenience Stores has lobbied for
the Senate and House bills. Convenience store and gas station owners have
long opposed tribal cigarette sales, which go untaxed as a rule because
tribal organizations cannot be taxed based on the status of tribes as
governments. This gives tribally affiliated and reservation-based
cigarette vendors a competitive pricing advantage over other
cigarette online
cigarettes vendors, whose prices must reflect state
excise, sales or use taxes. This pricing advantage in tax-free cigarettes
is doubly significant in that cigarettes are often used as a "teaser"
item, one that draws customers who will then spend on other items, such as
gasoline and food. cheap
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The next stop for H.R. 2824 is the full cigarettes
House Judiciary Committee. The full committee meeting on H.R. 2824 has not
yet been scheduled, according to Berman’s office. A spokesperson there,
requesting she not be quoted cigarettes
online by name because she was not at the Oct. 2
hearing, interpreted Berman’s brief remarks to mean any issues of tribal
sovereignty in the bill would be "taken up at the committee level." cheap
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Martin said USET will discuss the bills at a meeting
later this month. He expects either the organization or separate tribes to
take a position cigarettes on
the bill. "We’re against anything that restricts tribal sovereignty."
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The National Congress of American Indians and the
National marlboro
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Indian Gaming
Association have already weighed in against the bills’ potential
delegation of state authority over tribes.
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