NY begins tax collections on Indian cigarettes

By the Associated Press | July 15, 2011 | 5:29 PM EDT

ALBANY, N.Y. (AP) — After decades of delay, New York has started collecting taxes on cigarettes and tobacco products sold by Indian-operated companies.

Inspections at 357 retailers by state and federal law enforcement led to seizures of almost 20,000 cartons of cigarettes and nearly 25,000 cigars over the last three weeks. Officials say the products weren't properly taxed.

State officials valued the goods at $1.2 million.

Enforcement will continue to include inspections of retailers and stopping vehicles carrying tobacco products.

Gov. Andrew Cuomo says the tax enforcement on the huge Indian-run enterprises will generate $27 million in revenue for the state this fiscal year.

State officials won't try at this time to tax cigarettes manufactured by Indian-owned companies.

Tribes argue treaties exempt them from taxation, but courts have sided with New York.