John Crudele
The Rolling Stones said it best: “You can’t always get what you want.”
But it seems New York state never gets what it wants. That’s especially true when it comes to increasing tax revenue.
Case in point: cigarette taxes.
The state’s tax collectors were recently calling around to convenience-store owners, wondering what was up. The $130 million in extra tax that Albany was expecting from a change in the law about cigarette sales on Indian reservations wasn’t happening.
A memo sent to members of the New York Association of Convenience Stores from the group’s president, Jim Calvin — a copy of which I have on my desk — said, “I got a call from Gov. Cuomo’s budget office yesterday. In examining cigarette tax receipts so far this fiscal year (April 1 to March 31) it looks like they will fall considerably short of their projection in new revenues. . . .”
The state had hoped to get the extra dough by enforcing a new law that made it illegal for licensed cigarette wholesalers in the state to sell untaxed name-brand cigarettes like Newport and Marlboro to Indian reservations.
The reservation store would sell the cigarettes to non-Indian customers who were trying to avoid the hefty taxes imposed by the state. The state and legitimate sellers of cigarettes were both hurt.
The sale of nontaxed smokes by stores on Indian reservations became an issue two years ago when the state cigarette tax was raised significantly and many smokers took more of their business to reservations — or to Internet sellers — whose packs aren’t taxed. Some folks even bought lower-taxed cigs smuggled in from out of state.
Some wholesalers say sales are down between 20 percent and 30 percent among legitimate cigarette sellers.
State enforcement of the tax laws, meanwhile, has been lax, to say the least. New York, I’m told, has reduced the force working on illegal cigarettes by 80 percent since the tax hike went into effect.
But that’s another story.
So how much extra did the state collect in tax with the law change?
The state Department of Taxation did not return a call for comment.
But according to Calvin’s memo, “Cuomo’s budget office” was saying that cigarette tax revenues were flat this past October and November with the year before.
That seems to mean that Albany is $130 million short on its $130 million projection.
