Driving onto the Allegany Indian Reservation from the west, Ron's Smoke Shop makes an inviting first stop.

It's just one tax-free on Seneca Nation territory. And with state cigarette taxes on the rise, more Southern Tier smokers are making the trip to the reservation.

"Everyone I know goes down there," says Jill, a smoker from Olean. "A lot of people do."

Cars bustle in the shop's parking lot. A stream of people makes its way into the store, eager to pick up some Saturday morning smokes.

Stacks of cigarette cartons sit on several rows of shelves. Winstons. Unions. Markets. The works.

The cheapest brand? Seneca Cigarettes - $13.60 for 100 smokes.

Drive across the street. Next stop: M & M Smoke Shop.

Cigarette billboards plaster the store's exterior. Camels. Kools. Dorals also available.

Another vendor of Seneca Cigarettes. Big Flavor. Small Price. Huge Selection.

Piles of cigarette cartons add color to the store's pure white interior. White walls, white ceiling, white lights �? all thrown off-balance with dabs of red, blue and brown.

Take Route 417 farther west toward the junction of Route 219 and Interstate 86. Final stop: Allegany Junction Truck Stop.

Traditional Native American statues guard the shop. One extends his forearm and offers a greeting.

The Allegany Junction otherwise looks like a traditional convenience store. It sells drinks, snacks and newspapers.

That doesn't mean it's fooling around when it comes to tobacco.

The Junction has the cheapest smokes of all - $12 for a carton of Heron Cigarettes.

Each store has a different atmosphere. Each has a different owner. Each has different product.

But none of them are forced to charge an extra $2.75 in cigarette taxes.

"The Seneca Nation, our people and our lands, have been immune from state taxation since the United States was formed," says Maurice John, former president of the Seneca Nation, in testimony. "Agreement after agreement has reiterated this tax immunity."

Thanks to that sovereignty, the reservation is permitted to sell cigarettes for prices lower than the state's traditional venues.

Taxes and Tribes

Cigarettes off-territory have never been more expensive. June's cigarette tax increase bumped New York state's tax to the highest in the nation.

But not everyone is forking over the extra cash. Twenty percent of New York smokers buy tax-free cigarettes from Indian reservations on a regular basis.

"The incentive for them to do that has just gotten a lot bigger in the form of this tax increase," says Jim Calvin, president of the New York Association Convenience Stores.

And New York is left losing cash. New York City Mayor Michael Bloomberg says that the state's reluctance to enforce cigarette taxation laws is costing it more than $500 million a year.

"I think the governor should go to the reservations and say, 'As of tomorrow morning, stop this practice,'" Mayor Bloomberg said in the New York Times. "And if it requires law enforcement, that's what the governor has the State Police for �? to enforce the law."

Seneca Nation officials would not comment specifically on the economic benefits New York state's cigarette taxes generate for the Nation, but the Onondaga Nation hints at increased profits on its reservation as the result of the state's taxes.

"I can tell you anecdotally from driving down there that it certainly seems to be quite busy," says Joe Heath, general counsel of the Onondaga Nation. "My educated guess would be, yes, it is helping their business."

But what role do tobacco profits play in Native American economies in general?

"I think the best way to handle that is just to say that it's a significant role," Mr. Heath says. "(The Onondagas) would not be very comfortable revealing the details of that."

Different Nations, Different Ideas

Though each reservation sells tax-free tobacco, the policies of the nations can differ.

For example, unlike the Seneca Nation, the Onondaga Reservation only has one smoke shop.

"The store is owned by the nation. There is no individual ownership," Mr. Heath explains. "All of the profit from that store goes into the general revenue to fund the Nation."

The Nation claims that having one store keeps prices consistent with the area around them.

"We don't have 10 different stores cutting their prices to compete with each other and driving the price down," Mr. Heath says. "So our price isn't that problematic. It's closer to the price on the off-territory."

Despite their differences, both the Senecas and the Onondaga don't see tobacco sales at their reservations as tax evasion. The Onondagas argue that the state actually sees more money under their financial structure.

"Dozens and dozens of people earn money from the profits of this store," Mr. Heath explains. "That money is all spent off the territory in ways that generate five or six times the amount of taxes."

The Seneca Nation also says that it's become an economic engine for the state. According to a recent economic report commissioned by the Seneca Nation, it pumps $779 million into Western New York's economy.

"This is an economic development plan, and that's the way it needs to be seen. The money doesn't just drop into the ground, particularly in Onondaga. That money all comes back out," Mr. Heath stresses. "(The Onondagas) spend it where it's taxed."

Forcing the Tax

New York State recently revived its battle against tax-free tobacco sales on reservations.

During a special session last August, the State Senate passed a bill requiring tobacco vendors on reservations to tax their products sold to non-Indians, and the bill was signed by Gov. Paterson earlier this month.

The initiative aims to tax distributors of tobacco products.

"(The bill) says a distributor must file a formal statement that he or she will comply with all laws," Mr. Heath explains. "And if they don't, they can't get the product."

Indian nations across the state would receive rebates in exchange for complying with the bill.

"New York's structure now is that they would tax everything but issue coupons to the nations, which could then be redeemed back from the state," Mr. Heath says.

Implementing an effective coupon system remains a problem. Until that happens, the Legislature can't change a thing.

"The (State Supreme Court) has ruled that the law cannot be enforced until they do the administrative work necessary to put that protection on the Native Americans," Mr. Heath says. "No matter what little nudges the Legislature wants to push, it won't matter.

That's not to say Native Americans would comply with the bill. Former Gov. George Pataki tried to enforce a tax initiative in 1997 and was met with resistance, some of the most militant on the Seneca's reservations. Senecas blocked traffic on Interstate 86 and Interstate 90 with burning tires, and there were scuffles with state troopers.

But the Onondagas say they're willing to work with Gov. Paterson's office on the new initiative and reach a mutual agreement.

"It won't be easy. It never is. But it can be done," Mr. Heath admits.

The author of this article is:

the-cheapest-cigarettes[dot]com

smoke-discount-cigarettes[dot]com