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FROM: THE UTICA OBSERVER-DISPATCH NEWSPAPER

http://www.uticaod.com/archive/2005/...ion/24971.html

Editorial: State Must Settle Indian Tax Issues

Tue, Apr 12, 2005


Observer-Dispatch

Expanding casino gambling in New York is the topic of continuing hearings
this week in Albany. The state is hoping to exchange gambling rights in the
Catskills for the settlement of land claims covering more than 300,000 acres in
six
counties, including Oneida and Madison.

But before the state moves forward with new casinos, it must definitively
address the unsettled tax issues with the Oneida Indian Nation's Turning Stone
Casino Resort in Verona -- specifically, the property tax questions raised by
the recent U.S. Supreme Court ruling and the collection of sales tax on sales to

non-Indians.

So far the Oneidas have not sought a casino in the Catskills, but it's clear
the state would welcome such a deal. Discussions this week will include a
proposal to increase of the number of Catskill casinos from three (adopted in
2001) to five, which would leave a spot for the Oneidas.

But before the state makes any new casino deals, the ramifications of the
City of Sherrill v. Oneida Indian Nation ruling must be fully explored.

The court ruled the Oneida Nation cannot expand its tax-exempt property
holdings simply by buying up land that has been outside its control for years.
That
means recently acquired lands aren't considered reservation land and,
therefore, are not sovereign or off limits to taxes.

A spokesman for Gov. Pataki said last week the administration was still
considering the effects of the Sherrill ruling. It is critical that the state do

so, and take a firm stand in favor of collecting the property taxes.

That should be obvious. It's generally unnecessary to encourage the most
heavily taxed state in union to collect tax revenues, but with Indian nations
the
state has been inexplicably reticent to do so -- despite a favorable Supreme
Court ruling.

Three times the state has failed to follow through on legislation requiring
the payment of tax on sales by Indian businesses to non-Indians. The state
failed to follow through on collecting the taxes from Indians in 1992 and 1997;
a
law passed last year to collect sales tax was simply allowed to expire.

In making the Catskill deals Pataki has proposed "tax parity," which would
mean Indian businesses would raise their prices to match non-Indian competitors
that must pay sales tax, but would keep that additional money rather than pay
it to the state. Unacceptable.

Taxation and Finance Commissioner Andrew Eristoff said last week that Pataki
has retooled a proposal to set up a system for collection of taxes from
wholesalers that supply Indian retailers; a similar plan was shelved last year.

However it will work, it's time to collect the taxes. The long-running excuse
that the state fears violence is ridiculous. If there's violence, stop it and
prosecute the perpetrators -- that's why we have a criminal justice system.

Using gambling -- an addictive, destructive behavior -- to finance more and
more of state government is troubling in itself. But there may be no turning
back now. If the state is going deeper into the casino business, then do it
right. Before any more Indian-operated gambling houses open, put this house in
order.

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