BUFFALO, N.Y. (CN) – The Seneca Nation of Indians claims the United States unconstitutionally enacted a bill specifically directed at Native Americans, prohibiting them from selling cigarettes over the Internet and by mail, and forcing them to collect state taxes. The Prevent All Cigarette Trafficking (PACT) Act takes effect today (Tuesday). Seneca President Barry Snyder Sr. said the bill was written “to sabotage our federal treaty rights and rape our economy to bail out New York State.”
The law prohibits the post office from delivering cigarettes sold on the Internet and will force Native American vendors to pay excise taxes to local and state governments. President Obama signed it into law in April.
Seneca Nation member Aaron Pierce filed a federal complaint on behalf of his businesses, Red Earth and Seneca Smokeshop.
“This statute is targeted at Native American cigarette and smokeless tobacco vendors and specifically at the Seneca Nation of Indians,” the complaint states. “It was carefully crafted to increase State revenues by forcing Native American cigarette and smokeless tobacco vendors to collect sales and use taxes, despite a lack of substantial nexus with the State. Moreover, Members of Congress have described the Act as directed at Native American vendors.”
Pierce operates Seneca Smokeshop, which sells untaxed cigarettes exclusively by Internet and mail order. He claims the PACT Act violates the sovereign rights of Native Americans and will cause irreparable harm to his business.
Violators of the act will be subject to civil fines and could face felony charges, including a possible prison sentence of up to 3 years.
The statute will prohibit Seneca Smokeshop and other native-owned businesses from selling cigarettes to customers other than at reservation retail stores. Pierce says it also threatens his ability to obtain inventory.
The lawsuit accuses the United States and Attorney General Eric Holder of violating the Commerce Clause, the Import-Export Clause, the Due Process Clause, the Equal Protection Clause, the 10th Amendment, and Native American treaties.
Pierce seeks declaratory judgment invalidating the federal law.
The New York Legislature recently increased excise taxes on cigarette sales, making New York’s tobacco prices the highest in the nation. The legislation will tax cigarette sales on reservations made to non-Indians starting Sept. 1.
Gov. David Paterson said he hopes the move will provide the state with around $440 million a year.
Seneca President Barry Snyder Sr. said 3,000 Seneca and non-Indian employees of Seneca-owned tobacco businesses are in danger of losing their jobs due to the new tax, according to the Web site Indiancountrytoday.com.
“This is nothing less than a deliberate effort to sabotage our federal treaty rights and rape our economy to bail out New York State,” Snyder said in a statement. “Gov. Paterson and members of the state Legislature should be ashamed of themselves for looting our economy because they’ve squandered theirs through overspending and poor management. We are not a piggy bank the state can break open to grab extra cash. We are a sovereign nation protected by federal treaties and we will defend those treaties by whatever means necessary.”