September 20, 2010 - The latest is from a U.S. District Court judge who issued a temporary restraining order preventing the state from collecting sales taxes on cigarettes sold by the Oneida Indian Nation and other tribes across the state.
Lawrence Kahn, a judge with the U.S. District Court for the Northern District of New York, issued the order Thursday, September 16th in response to a suit filed by the St. Regis Mohawk Tribe. State officials must show cause why the order shouldn't become permanent in a hearing set for September 23rd.
Mark Emery, the Oneida Nation's director of media relations, says the restraining order is a blanket one that prevents the state from collecting the tax from any tribe. The [Oneida] nation filed its own suit seeking a federal injunction earlier this week after a five-judge panel of a state appellate court lifted a previous injunction barring the state from collecting the tax. (New York State - state court clears way for state to collect cigarette tax - on to federal court..)
The lawsuits are the latest round in a long-standing battle between the state and the tribes over sales tax on cigarettes. U.S. District Judge Richard J. Arcara for the Western District of New York had granted a request by two western New York tribes for a court order that would stop the state from imposing a $4.35 per-pack sales tax on cigarettes sold by reservation retailers starting Wednesday, September 1, 2010. (New York State - Seneca Nation and other Indian Tribes get injunction from federal judge delaying tax collection on cigarettes..) This same federal judge on Tuesday, September 7th extended his order blocking the state from taxing two Indian nations' cigarette sales to non-Indian customers while legal challenges to the state's plans continued to mount. (New York State - U.S. District Judge extends order blocking state from collecting taxes, hearing Sept 14th..)
The state expects to gain as much as $110 million for the rest of this fiscal year and $200 million annually after that from collecting the sales tax. The state had been planning to require wholesalers to levy the tax before tribes purchased cigarettes for resale. Previous efforts to force tribes to collect the tax at the point of sale have been unsuccessful.
Oneida Nation Chief Operating Officer Peter Carmen previously said the nation would not allow the state to pass along taxes to its customers in that manner and planned to cease selling name-brand cigarettes if the state attempted to collect the tax.
Several weeks ago, the nation relocated its Sovereign Tobacco company from Buffalo to nation lands in Oneida. Federal law allows tribes to sell items they produce on their reservations tax free.
If the state moves at some point to collect the tax, the nation has said it will start selling only its own two brands - Niagara's and Bishop - after it exhausts its inventory of name-brand products. The Oneida Indian Nation is one of the region's largest employers with approximately 4,800 workers at its various enterprises.
St.Regis Mohawk Indian Reservation in New York may be involved in the availability of illegal cigarettes in Canada, especially in the Provinces of Ontario and Quebec. (Canada, Ontario and Quebec - illegal cigarettes greater than 40% of consumption..)
Reference: Judge grants cigarette tax restraining order by Traci DeLore, The Greater Binghamton Business Journal, 9/17/2010.
Some related news briefs:
New York State - state court clears way for state to collect cigarette tax - on to federal court..;
New York State - U.S. District Judge extends order blocking state from collecting taxes, hearing Sept 14th..;
New York State - cigarette tax collection from Native American sales pushed off until 5-judge panel decides..;
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..;