Stewart's Among the Stores Hurt by Indian Tobacco Sales

Stewart's Shops are losing business to Native American vendors who are selling tax-free cigarettes over the Internet and in "smoke shops" close to Indian lands."Absolutely, we are impacted," said Rick Dunn, Stewart's vice president of distribution services. "But how one quantifies that impact is very difficult because this has been going on in various forms since 1995 and even earlier."The experience of Stewart's, whose Saratoga Springs base is distant from Indian retailer stores, has become typical of non-Indian convenience store operators in almost every part of New York state, said James Calvin, president of the New York Association of Convenience Stores.The Albany-based association is the lead plaintiff in a suit filed this week seeking to make the Pataki administration collect state taxes on gas and cigarettes sold by Indian vendors to non-Native Americans.

The association estimates the state could generate an extra $450 million a year if the taxes are collected, as the state Legislature directed Gov. George Pataki to do in 2003, 2004 and 2005. Calvin said Indian vendors are sapping sales away from non-Indian businesses both through the Internet and among New Yorkers who are willing to drive hundreds of miles to stock up on cheaper cigarettes at Indian "smoke shops." The state's excise tax on a carton of cigarettes has increased from $5.50 to $15 since March 2000, making the savings attractive for some smokers.

May 8, 2006
Posted By Hector Rodriquez
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