New York State - cigarette tax collection from Native American sales pushed off until 5-judge panel decides..

September 2, 2010 - A state appellate judge Wednesday, September 1st temporarily pushed off the tax collection on Native American sales of cigarettes to non-Indians across New York.

A day after a federal judge granted a two-week reprieve in a related case, a spokeswoman for Gov. David A. Paterson said the state is standing down on the tax collections because of a stay issued Wednesday by Judge Samuel L. Green of the Fourth Department of the State Appellate Division.

The order reinstated a temporary restraining order that had been issued by another state judge in January 2009, according to state officials. (Snyder hails extension of cigarette tax ban by Matt Grytam The Buffalo, News, 1/28/2009; NY Governor signs bill to attempt to curb illegal sale of tax-free cigarettes to non-Indian purchasers..)

A five-judge panel from the appellate court will consider the tax-collection issue in more depth next Thursday, September 9th said Margaret A. Murphy, the Buffalo attorney who persuaded Green to reinstate the restraining order Wednesday.

The governor's office said the state is making efforts to have the injunction lifted once again but, in the meantime, will not enforce the cigarette tax collections against any tribe. "We are disappointed today that the Appellate Division has stayed the implementation of our statute and regulations," Paterson spokeswoman Jessica Bassett said.

Wednesday, September 1st was when state officials had planned to start collecting a $4.35-a-pack sales tax on cigarettes sold to non-Indians. However, a ruling Tuesday by U.S. District Judge Richard J. Arcara temporarily blocked any collection at the Seneca and Cayuga territories. (New York State - Seneca Nation and other Indian Tribes get injunction from federal judge delaying tax collection on cigarettes..)

Two past governors — Mario M. Cuomo in 1992 and George E. Pataki in 1997 — tried to tax cigarettes sold by Indians, but their efforts ended after violent protests from some of the tribes.

The state case has bearing on tribal territories statewide.

"We asked Judge Green to reinstate the temporary restraining order, and he agreed to do so. We're glad that he took the prudent measure of putting things back at the status quo so the judges can look at it next Thursday," Murphy said.

Murphy represents Scott B. Maybee, a successful Seneca cigarette retailer, and Day Wholesale, a non-Indian cigarette wholesaling company located in Tupper Lake in the Adirondacks. She said that both of her clients would suffer great losses of business if the state efforts go forward.

References: State relents after ruling on cigarette tax Restraining order reinstated by judge by Dan Herbeck and Aaron Besecker News Staff Reporters, The Buffalo News, 9/2/2010; Court Blocks New York Tax on Tribal Cigarette Sales by FERNANDA SANTOS, The New York Times, 9/1/2010.

Some related news briefs:
New York State - Seneca Nation and other Indian Tribes get injunction from federal judge delaying tax collection on cigarettes..;
New York State - Governor Patterson will not tax cigarettes sold among Native Americans..;
New York - Senecas asking for Bloomberg to resign over remarks he made..;
New York State - Seneca Indian Nation files sued to block enforcement of a plan to collect cigarette taxes..;