N.Y. Tax Law § 471-e: Taxes imposed on qualified reservations

§ 471-e. Taxes imposed on qualified reservations. 1. Indian tax

exemption coupon system. (a) Notwithstanding any provision of this

article to the contrary qualified Indians may purchase cigarettes for

such qualified Indians' own use or consumption exempt from cigarette tax

on their nations' or tribes' qualified reservations. However, such

qualified Indians purchasing cigarettes off their reservations or on

another nation's or tribe's reservation, and non-Indians making

cigarette purchases on an Indian reservation shall not be exempt from

paying the cigarette tax when purchasing cigarettes within this state.

Accordingly, all cigarettes sold on an Indian reservation to non-members

of the nation or tribe or to non-Indians shall be taxed, and evidence of

such tax will be by means of an affixed cigarette tax stamp.

(b) In order to ensure an adequate quantity of cigarettes on Indian

reservations which may be purchased by qualified Indians exempt from the

cigarette tax, the recognized governing body of an Indian nation or

tribe may annually elect to participate in the Indian tax exemption

coupon system for that year. If the recognized governing body of an

Indian nation or tribe elects within the time specified by the

department to participate in the Indian tax exemption coupon system for

that year, the department shall provide the Indian nation or tribe with

Indian tax exemption coupons as set forth in this section. If the

recognized governing body of an Indian nation or tribe does not elect to

participate in the Indian tax exemption coupon system for that year or

does not make this election for that year within the time specified by

the department, no Indian tax exemption coupons will be provided to that

Indian nation or tribe for that year. Instead, for that year, the prior

approval system set forth in paragraph (b) of subdivision five of

section four hundred seventy-one of this article shall be used. When the

recognized governing body of an Indian nation or tribe elects to use the

Indian tax exemption coupon system for a year, an Indian nation or tribe

and a reservation cigarette seller shall be able to present such Indian

tax exemption coupons to a wholesale dealer licensed pursuant to this

article in order to purchase stamped cigarettes exempt from the

imposition of the cigarette tax. Qualified Indians may purchase

cigarettes from a reservation cigarette seller exempt from the cigarette

tax even though such cigarettes will have an affixed cigarette tax

stamp.

2. Indian tax exemption coupons. (a) If the recognized governing body

of an Indian nation or tribe timely elects to participate in the Indian

tax exemption coupon system for that year, Indian tax exemption coupons

shall be provided to the recognized governing body of such Indian nation

or tribe to ensure that such Indian nation or tribe can obtain

cigarettes upon which the tax will not be collected that are for the use

or consumption by the nation or tribe or by the members of such nation

or tribe. The Indian tax exemption coupons shall be provided to such

Indian nations or tribes on a quarterly basis for each of the four

quarters beginning with the first day of December, March, June, and

September of that year. It is intended that the Indian nations or tribes

will retain the amount of Indian tax exemption coupons they will need

each quarter to purchase cigarettes for official nation or tribal use,

and will distribute the remaining Indian tax exemption coupons to

reservation cigarette sellers on such nations' or tribes' qualified

reservations. Only Indian nations or tribes or reservation cigarette

sellers on their qualified reservations may redeem such Indian tax

exemption coupons pursuant to this section.

(b) The amount of Indian tax exemption coupons to be given to the

recognized governing body of each Indian nation or tribe shall be based

upon the probable demand of the qualified Indians on such nation's or

tribe's qualified reservation plus the amount needed for official nation

or tribal use.

(i) Probable demand shall be determined by reference to, among other

data, the United States average cigarette consumption per capita, as

compiled for the most recently completed calendar or fiscal year,

multiplied by the number of qualified Indians for each such affected

Indian nation or tribe.

(ii) In making a determination of probable demand, the department

shall take into consideration any evidence submitted by such recognized

governing body relating to such probable demand (e.g., a verifiable

record of previous sales to qualified Indians or other statistical

evidence) and/or relating to the amount needed for such nation's or

tribe's official use.

(c) Each Indian tax exemption coupon shall consist of a retention

portion for a wholesale dealer's recordkeeping purposes and a redemption

portion for a wholesale dealer's submission to the department when

claiming a refund as set forth in subdivision four of this section, and

shall contain the following information:

(i) the identity of the Indian nation or tribe to which it is issued;

(ii) the identity and the quantity of the product for which it is

issued;

(iii) the date of issuance and the date of expiration; and

(iv) any other information as the commissioner may deem appropriate.

3. Tax exempt purchaser. (a) An Indian nation or tribe may purchase

cigarettes for its own official use or consumption from a wholesale

dealer licensed pursuant to this article without payment of the

cigarette tax to the extent that the Indian nation or tribe provides

such wholesale dealer with Indian tax exemption coupons entitling the

Indian nation or tribe to purchase such quantities of cigarettes as

allowed for on each Indian tax exemption coupon without paying the

cigarette tax.

(b) A qualified Indian may purchase cigarettes for his or her own use

or consumption without payment of the cigarette tax, provided that the

qualified Indian makes such purchase on a qualified reservation.

(c) A reservation cigarette seller may purchase cigarettes for resale

without payment of the cigarette tax from a wholesale dealer licensed

pursuant to this article:

(i) provided that such reservation cigarette seller brings such

cigarettes or causes them to be delivered onto a qualified reservation

for resale on such reservation;

(ii) to the extent that such reservation cigarette seller provides

such wholesale dealer with Indian tax exemption coupons entitling the

reservation cigarette seller to purchase such quantities of cigarettes

as allowed for on each Indian tax exemption coupon without paying the

cigarette tax; and

(iii) provided that such cigarettes are affixed with a cigarette tax

stamp.

(d) Wholesale dealers shall sell only tax-stamped cigarettes to Indian

nations and tribes, reservation cigarette sellers and all other

purchasers, but shall not collect the cigarette tax from any purchaser

to the extent the purchaser gives such wholesale dealer Indian tax

exemption coupons entitling the purchaser to purchase such quantities of

cigarettes as allowed for on each such Indian tax exemption coupon

without paying the cigarette tax.

4. Refunds. A wholesale dealer licensed pursuant to this article who

has one or more Indian tax exemption coupons may file a claim for refund

as provided for in section four hundred seventy-six of this article with

respect to any cigarette tax previously paid on cigarettes it sold

without collecting the tax because it accepted an Indian tax exemption

coupon from its purchaser pursuant to this section.

5. Tax agreements with Indian nations or tribes. If an Indian nation

or tribe enters into an agreement with the state and the legislature

approves such agreement regarding the sale and distribution of

cigarettes on the nation's or tribe's qualified reservation, the terms

of such agreement shall take precedence over the provisions of this

article and exempt such nation from such taxes to the extent that such

taxes are specifically referred to in the agreement, and the sale or

distribution, including transportation, of any cigarettes to the

nation's or tribe's qualified reservation shall be in accordance with

the provisions of such agreement.

6. The failure of the department to establish, issue and provide

Indian tax exemption coupons, pursuant to subdivisions one and two of

this section, or to promulgate any rules, regulations or directives

necessary to implement the provisions of this section, shall not relieve

wholesale dealers of the obligation to sell only tax-stamped cigarettes

to Indian nations and tribes, and to reservation cigarette sellers.