Convenience Stores Call for Suspension of 58% Cigarette Tax Hike

ALBANY, NY (09/01/2010)(readMedia)-- The New York Association of Convenience Stores today asked Governor Paterson to issue an executive order suspending the 58% tax hike on cigarettes that took effect July 1, in fairness to long-suffering retailers whom state and federal courts have now deprived of the "other side of the bargain" -- the promise level playing field starting September 1.

"In light of the court rulings blocking the start of tax collection on Indian sales of cigarettes to non-Indians, the New York Association of Convenience Stores respectfully requests that you temporarily suspend the cigarette excise tax increase that was enacted July 1," wrote NYACS President James Calvin.

"The double-edged bargain you made with the Legislature in June was to sharply increase the cigarette tax rate on July 1, but to mitigate its negative effect on tax-collecting retailers by capturing taxes on tribal sales to non-Indians starting September 1. If one side of this bargain has been placed on hold, it's only fair that the other should be put on hold as well."

Since the cigarette tax hike jumped from $2.75 a pack to $4.25 a pack July 1, NYACS said mom-and-pop stores have lost 25% to 45% of their cigarette unit sales, virtually all of it because of the ensuing wave of cigarette tax evasion it triggered. "They shouldn't have to continue to endure this economic hardship while courts allow their Native American competitors to keep thumbing their noses at New York State's tax law," Calvin wrote.

"We share your deep disappointment in the federal and state court rulings on the cigarette tax collection issue," he told Governor Paterson. "We were looking forward to a level retail playing field finally being restored. We nonetheless commend you for your courageous leadership on this issue, and look forward to supporting your efforts to lift the temporary restraining orders."