Trucker escapes $1.3 million fine for tobacco tax

By Tyson Fisher, Land Line staff writer | 6/30/2017

A Native American truck driver in New York is off the hook for nearly $1.3 million in fines for unstamped cigarettes he was transporting to another Native American territory. The man claims that in addition to violating Native American law protections, commercial vehicle inspectors violated his Fourth Amendment rights.

Shawn Snyder, a member of the Seneca Nation of Indians, was a driver for ERW Wholesale, delivering cigarettes to Indian territories located in Western New York. ERW Wholesale is Seneca-licensed to operate as a tobacco wholesaler and to deliver to Native American vendors.

In December 2012, ERW Wholesale received an order from Oien’Kwa Trading, another Native American-owned company, for 9,000 cartons (150 cases) of King Mountain cigarettes. King Mountain Tobacco Co. is also a Native American-owned business.

During the delivery on Dec. 3, 2012, Snyder failed to stop at an inspection station. A state trooper pulled Snyder over and directed him back to the inspection station after Snyder told the trooper he was hauling cigarettes. Back at the station, the trooper told an inspector that he suspected the cigarettes were unstamped.

Snyder provided law enforcement with delivery documents and the phone number to his attorney. After a Level 2 inspection, the inspector asked for the key to unlock the back door, which Snyder did not have. Without a warrant or any other notice, inspectors cut off the lock to notice sealed boxes.

At this point, law enforcement had no idea what brand of cigarettes were in the boxes or other additional details.

After cutting the padlock and confirming the contents of the truck, which matched Snyder’s description and corresponding documentation and which were not hazardous or dangerous to the public if improperly secured, the sealed cases were opened.

Court documents reveal that law enforcement never asked Snyder whether or not the cigarettes were stamped prior to opening sealed packages. Furthermore, Snyder was never free to leave as law enforcement took his keys. Snyder was never informed of his Miranda rights either.

In July 2011 the Deputy Commissioner for the Office of Tax Enforcement issued an email, which stated that unstamped Native American cigarettes being transported by a Native American from one New York State Indian reservation to another New York State Indian reservation should not be seized.

In May 2011, State Senators George Maziarz and Tim Kennedy sent a letter to the New York State Department of Taxation and Finance in which they stated: “It is our view that Native Brand cigarettes, which are produced and sold on lands owned by Native Nations, constitutes commerce that is essentially Native to Native, and therefore cannot be regulated or taxed by the State of New York”; and “It is our view that the State should not pursue an effort to collect taxes on Native Brands because such an effort would be contrary to the sovereign rights of the Native American Nations, and would be a severe blow to the Native retail economy.”

Nevertheless, the cargo was seized and Snyder was instructed to drive the truck to a police station. He was free to leave after the cargo was unloaded. Snyder was fined $1,259,250 for unstamped cigarettes.

In May 2013, Snyder and his attorney contested the claim. After a long legal process, the courts decided in Snyder’s favor.

The Tax Division claimed that the driver of a company is not entitled to the exemptions afforded by tax laws given to the company. The division claimed that Snyder himself was not a licensed agent or distributor.

The Tax Appeals Tribunal ruled that tax laws “provides an exemption for common and contract carriers engaged in lawfully transporting unstamped packages of cigarettes as merchandise, and to any of such employee acting within the scope of his employment.”

Since the tribunal ruled that tax law alone exonerates Snyder, the issues of Fourth Amendment rights and excessive fines were rendered moot.

Copyright © OOIDA