Monday, April 2, 2007

The Looming Tax Showdown

Who will blink first? New York State or the Oneida Indian Nation?

This year, the Oneida Nation and other tribes will pay taxes. The state plans to collect $200 million in sales and other taxes on goods sold by Indian-owned businesses in 2007-08. If Gov. Eliot L. Spitzer doesn’t enforce the law, his brand new budget will be revenue-short. Gov. Spitzer included sales and excise taxes on cigarettes and motor fuel in his budget plan back in January, and the state Legislature left the revenue line intact in its version of the budget that was adopted Sunday. The bid to collect sales and excise taxes is a turnaround in policy from that of former George E. Pataki, who broke with state legislators by rebuffing their efforts in recent years to force the collection of the levies through legislation.

In the past our state government has always backed down on it's repeated empty threats to collect taxes on the Nation, but Spitzer's inclusion of tax revenue from Indian-owned businesses in the budget and the Department of the Interior's re-evaluation of the gaming compact makes it look like things will finally come to a head this month. This issue has dragged on for years, to the detriment of all parties, and it's time that it finally gets resolved, one way or the other.

Oh, and I think Spitzer will blink first. The Nation is more than willing to stand up against both the state and the federal government and, realistically, there's little either can do to punish the tribe without setting off a public relations disaster.