Gristedes Owner Joins Fight Against New York State Cigarette Tax Hikes

NEW YORK -- John A. Catsimatidis, chairman of the Red Apple Group and owner of 45 Gristedes's supermarkets in New York City and over 200 Kwik Fill, Red Apple, and Country Fair convenience stores in upstate New York, said yesterday that he's teaming up with the New York Association of Convenience Stores (NYASC) and other small New York businesses against any additional state cigarette tax increases, until the state enforces the law and collects taxes from American Indian reservation retailers on cigarette sales to non-Indians purchasers.

Over a decade ago, the U.S. Supreme Court upheld in a 9-0 ruling the legality of taxing reservations' cigarette sales to non-Indians. Additionally, the New York State Senate and Assembly have passed laws that Indian retailers that sell cigarettes to non-Indians in the state must pay the tax.

According to Catsimatidis, a longtime advocate of enforcing the tax, "There can be no further delay in the implementation of this law, and certainly not until March 2007, which the new state budget suggests. Enforcement of gasoline and cigarette taxes on sales of these products at reservations would generate more $400 million a year in revenue and bring business back to legitimate retailers."

He pointed out that cigarette cartons were selling for as little as $20 a carton on the reservations, compared with $48 and more at nonreservation retailers, resulting in more consumers going to buy their cigarettes at reservations and "thus depriving the state of revenue and hurting legitimate retailers."

In Catsimatides' view, raising the tax would only make the problem worse. "A cigarette tax increase at this time would further the already wide disparity between tobacco prices at reservation stores and other New York State retail outlets. A tax increase would hurt beleaguered storeowners who are already reeling from the effects of previous increases and would, at the same time, generate more smuggling and black-market activity."

He characterized the argument of Gov. George Pataki's office that enforcing the law would lead to violent opposition as "pure nonsense, [sending] the wrong message to law-abiding New Yorkers."
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