New York Congressman Peter King claims New York’s practice of not collecting taxes on Indian cigarette sales, despite have a law requiring it to do so, supports smugglers whose profits can support terrorists.
King, a Long Island Republican, wants an investigation into what he calls a "very serious homeland security issue." A prominent Indian leader called the charges "overblown and underdocumented," according to an Associated Press report.
New York doesn’t collect taxes on cigarettes sold on Indian land. Many Indians believe the tax would violate their sovereignty. Attempts to collect tax a decade ago led to violent clashes between state police and the Seneca Indian Nation in western New York.
Critics claim that by refusing to levy the tax, the state misses out on hundreds of millions in revenue and puts convenience stores near Indian land at a disadvantage.
King released a report this week by the Republican staff of the House Committee on Homeland Security that said it’s also a security issue because smugglers in New York rely on tax-free cigarettes from Indian reservations.