WCBS TV Channel 2- Cigarette Mail Ban Hitting NY Tribe's Businesses

(June 28, 2010)

Jun 28, 2010 6:56 am US/Eastern

SALAMANCA, N.Y. (CBS) ― A new law taking effect Tuesday will ban the shipment of cigarettes through the mail and no one will feel the effects more than western New York's Seneca Indian Nation.

Seneca-owned businesses dominate the discount mail-order cigarette industry. Tribal leaders say the Prevent All Cigarette Trafficking Act will gut the nation's $100 million a year tobacco economy and eliminate 3,000 jobs held by workers in and outside the tribe.

Already, mail-order businesses in Salamanca were shutting their doors.

Supporters see the PACT Act as a way to limit teenagers' access to cigarettes and stop smokers from dodging state taxes. But opponents say it's an attack on tribal sovereignty and a ploy by big tobacco to regain market share being lost to native brands.

Meanwhile, New York smokers were facing a huge hike in the tobacco tax. The
state tax on a pack of cigarettes will jump to the highest in the country.

Gov. David Paterson used an emergency spending bill to force legislators to approve the huge tobacco tax hike. The tax on a pack of cigarettes will skyrocket from $2.75 to $4.35, and the tax on cigars and chewing tobacco will climb from 46 percent of the retail
price to 75 percent.

In a region where people can easily travel from New Jersey to New York to Connecticut, a higher tax here may encourage smokers to buy their cigarettes elsewhere. New York's tobacco tax will be much higher than the $3 per pack in Connecticut and the $2.70 per pack in New Jersey.

"I think people will find other ways, go out of state and stuff to buy cigarettes," said Parkchester Resident Tiffany Barnwell.

Or they could decide to kick the habit. The
American Lung Association predicts the tax will encourage many smokers to quit.

"About 15 percent decrease in teen smoking will result as initiation of this tax, and a 5 percent adult smoking decrease from the tax itself," said Scott Santarella, CEO of the American Lung Association New York.

For the hardcore smokers, even a breathtaking tax hike won't stop them. "You can tax us. We'll always keep smoking, because we're smokers, you know what I'm saying?" said White Plains resident Drew Davis.

The new tax takes effect September 1.

Paterson said the hike, combined with a plan to collect sales tax on cigarettes sold by Native American tribes, will raise more than $400 million a year.

CBS 2HD's Tony Aiello contributed to this report.