By Joyce Kryszak
Buffalo, NY – The operator of the Western New York chain of 34 convenience stores says there's nothing illegal about his tobacco kiosk arrangement with the Oneida Indian Nation. The Oneida's last week opened electronic terminals, which offer tax free cigarettes, at six of the Yellow Goose Markets run by Mark Sidebottom.
The off-reservation business has come under scrutiny by the state Attorney General's office. Critics say the kiosks allow people to skirt state cigarette taxes.
A tax increase of 39-cents per pack went into effect Wednesday, bringing the total to $1.50 per pack.
Officials say there are other legal problems with the kiosks, including minimum purchase requirements, and the possible sale of tobacco products to minors. Sidebottom described the terminals as nothing more than a legitimate lease deal.
"We have ATM machines in our stores that we are a paid commision on. We have other pieces of equipment in this store that we are paid commissions from - this is no different from that," said Sidebottom. "It's age verified. You need to be of age to buy the products that's being sold. We are doing that age verification. There is nothing illegal about what we are doing."
Sidebottom would not disclose how much he is paid for the kiosk placements. He did say, that if successful, the Oneida's Smokes Posts will be installed in all 34 of his stores.
As the state tax has gone up in recent years, convenience store owners have been losing cigarette sales to the Indian reservations. But the Attorney general's office says retailers should think twice about the new venture as a solution. Sidebottom says what retailers are thinking twice about is recouping lost profits.
"I'm sure that other people are going to get involved in it if they think it is a solution to their problem, or an ancillary way to make some income in their stores - that's their decision," said Sidebottom.
At least one Seneca businessman has also expressed interest in exploring a future in the off-reservation tobacco sale business. One thing for now is clear. For Indian and non- Indian merchants alike, the increased state cigatette taxes are not detering smokers - they are merely spurring alternative businesses.