ALBANY — Leaders of the St. Regis Mohawk Tribe say a renewed state effort to force collection of state sales taxes on reservation tobacco sales will harm the regional economy.

On Aug. 8, the state Senate passed legislation to ban manufacturers from selling tobacco products to anyone who does not certify that taxes will be collected on their retail sale. The idea is to force the state's Indian nations to collect state sales taxes on tobacco sales to non-Indians.

"This bill, like similar legislation proposed before it, will harm the Northern New York economy, not help it," said Chief James W. Ransom, citing a 2003 study performed by Regional Economic Models Inc. "The economic impact could be greater than $2 million per year."

"We already collect fees from tribal businesses that would be harmed by this legislation and that will hurt our ability to deliver essential governmental services," said Chief Barbara A. Lazore. "It will also result in a loss of jobs that no one in the state is even considering."

The St. Regis tribal government says it takes in approximately $4 million annually in licensing fees from businesses operating on the reservation, which it uses to fund programs in education, health care, law enforcement and services for the elderly. The tribe also employs hundreds of non-Indians.

Tribal leaders do, however, welcome the opportunity to discuss the issue with Gov. David A. Paterson. Last week, Gov. Paterson expressed his willingness to talk with Indian leaders from around the state on the taxation issue.

"We commend the governor for taking the position he would like to meet with the Indian nation leadership in the state to discuss this issue," said Chief Monica M. Jacobs. "The tribe has always been open to having such a dialogue."

Previous governors, notably Republican George E. Pataki and Democrat Eliot L. Spitzer, have come into office intent on forcing tribes to collect state sales taxes, something the tribes — citing treaty rights and sovereignty concerns — strongly oppose.

After Mr. Pataki mobilized the state police to enforce tax collection on Seneca Nation lands in Western New York in 1997, Indians responded by blocking the Thruway with burning tires. Mr. Pataki eventually backed down, but subsequent negotiations with tribes over tax collection and the awarding of three casinos in the Catskill Mountains failed to yield fruit. In 2006, Mr. Pataki vetoed legislation similar to that which passed the Senate earlier this month.

After tough talk on the campaign trail, Mr. Spitzer toned down his tax-collection rhetoric upon taking office in 2007.

Last Friday, the St. Regis Tribal Council sent Gov. Paterson a letter, commending him for "taking the initiative to open a dialogue with tribes/nations. We believe that building a positive relationship is the key to resolving many of the differences between the state and us." The council also requested a meeting with the governor for "an open and frank discussion" on taxation issues. No date has been set for such talks.

One possible outcome of tribal-state negotiations could be a tax compact — an agreement defining the taxation relationship between the two parties. Such compacts can offer predictable revenues for both sides while allaying competition concerns of non-reservation businesses.

Several states — Washington, Oregon, Montana, Minnesota, Wisconsin, Michigan, Arizona and Oklahoma — have negotiated tobacco tax compacts with their resident Indian nations. Fifteen states, most of them west of the Mississippi River, have negotiated fuel tax compacts with various Indian nations.

Gov. Paterson told the Buffalo News last week "I know that I believe I have the legal right to collect the taxes," but at the same time questioned widely ranging estimates of revenue — from $400 million to $1.6 billion — that enforced collection would bring in. He also told the News that some lawmakers push for tax collection to avoid having to make decisions on cutting popular budget items like education.

"It is only by building a positive relationship that state tax concerns can be mutually addressed," Mr. Ransom said. "We look forward to the opportunity to do that with Gov. Paterson."