Seneca to NY: you won't collect from us

ALBANY, N.Y. (WIVB) - Governor Paterson is promising Indian cigarette retailers he will collect. Developments are heating up just a few days before the tax man is set to arrive.

September 1st is when this new tax law is supposed to take effect. We'll certainly learn more on Friday when a federal judge takes up the issue, but now, both sides of this controversial collection blitz are speaking out.

The tobacco troubles are heating up between Native Americans and New York State. The state plans to begin collecting taxes on cigarettes sold by Native American stores. J.C. Seneca told News 4 he hopes a federal judge will rule on Friday to delay enforcement.

"They're not going to collect from us. We're not tax collectors for NY. We'll try to operate businesses we have. We're not paying New York come Wednesday," said Seneca.

Tribes claim the tax policy violates their rights. The last time the state tried to collect protests erupted and tires were burned on the thruway. Thursday morning, a business coalition called on leaders in Albany to stick to the plan. The tax is expected to generate a $150 million a year in new revenue.

James Calvin of the NY Association of Convenience Stories said, "It's a step that's long time coming, long overdue. It's costing New York billions in lost revenues."

It's also costing retailers. Noco stores experienced a 30 percent drop in cigarette sales since taxes increased in July.

President of Noco Express shops Michael Newman said, "700 people who work for Noco know we can't build new stores or expand business because of taxation policy."

Tribes have requested federal court orders to stop the tax collection, citing their sovereignty. On Thursday, the governor renewed his promise to start collecting. For J.C. Seneca, the countdown comes comes as he opens a new mixed martial arts center in Depew.

>>>You can learn more about J.C. Seneca's new center in Lorey's reporter's notebook

Seneca said, "New York is the highest taxed state in the country and it's their own fault for the financial situation it put its own people in. The people in Albany have to do better business, govern better."

Judge Arcara is slated to hear arguments Friday afternoon. In the meantime, the governor renewed his position on Thursday despite State Police warnings that such enforcement could result in violence. No one News 4 spoke to endorsed such activity, especially in today's post 9/11 world.