Albany - New York State Department of Taxation and Finance Acting Commissioner Jamie Woodward announced that implementation of the system to ensure that an adequate quantity of tax-free cigarettes will be available for the personal consumption of the nation's or tribe's members is on schedule. This new system was enacted into law in June with a September 1 effective date. The new system regulates the conduct of New York's licensed cigarette agents and wholesalers by prohibiting them from selling cigarettes that do not bear a tax stamp to reservations sellers.

According to the law, the Department is required to implement two distinct tax enforcement systems under which New York State licensed cigarette wholesalers can receive authorization to sell tax-exempt cigarettes to Indian nations for their own personal use and consumption.

The law includes a coupon system that each Indian nation or tribe could opt into, with a default system requiring prior approval for tax-free sales by cigarette wholesalers to Indian reservation cigarette sellers. The system requires agents to affix the tax stamp to the cigarettes, which certifies pre-payment of sales and excise tax. Then they will apply to the Department for an expedited refund on exempt sales to reservation sellers of tribal governments that occur in accordance with the law.

In addition, the new law requires that, as of September 1, all cigarettes delivered to Indian reservations bear a State cigarette tax stamp.

In order to ensure the smooth flow of tax-exempt cigarettes to the reservations, the Department's prior approval system will be fully operational today, so that New York State licensed cigarette wholesalers can receive authorization for sales of stamped tax-exempt cigarettes with anticipated delivery dates of September 1 and thereafter.

The move follows a court hearing in Buffalo on Monday where State Supreme Court Justice Donna M. Siwek lifted two injunctions issued by the court in 2007 and 2009 that barred the State from enforcing the taxation of cigarette sales to non-Indians on Indian reservations.