The order follows Governor Pataki s announcement that theState would no longer seek to enforce tax collection from NativeAmerican sales of fuel and cigarettes to non-Native Americans. Marketers in the State havethreatened to stop paying taxes on fuel and cigarettes if the courts rulein favor of Native Americans selling tax free to all individuals. Statelegislators contend Pataki s proposal will increase tax evasion by makingit easier for marketers to buy tax-free merchandise from reservationsand resell them to retailers throughout the State. Pataki originallywas a supporter of enforcing the tax collection but several violentincidents have caused the Governor to change his mind. The SupremeCourt has ruled that States are entitled to collect taxes on sales tonon-Native Americans but enforcement is extremely difficult.
Marketers say they are simply fighting for a level playingfield.
In August, the State appellate court decided that the lower courtruling requiring tribal tax collection was too broad. The situation hasbeen compounded by Governor Pataki s change of stance which initiallywas in support of collecting the taxes, but now is one ofnonenforcement brought about by riots and controversy. The rider stated that if a tribe accepts certain Federal funds, theywould have to give up their sovereign immunity which shields tribes fromcivil litigation and places them outside the jurisdiction of the Federal courtsystem. The law requires tribes to pay a gross receipts tax of 5 to 6cents per gallon on all fuel sold off the reservation, while fuel to be usedon the reservation must be delivered and physically unloaded on thereservation. State passed bills are rarely enforced according to manymarketers.