New York State - U.S. District Judge extends order blocking state from collecting taxes, hearing Sept 14th..

September 9, 2010 - U.S. District Judge Richard J. Arcara 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..)

The same federal judge 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. U.S. District Judge Richard Arcara scheduled a hearing for September 14 on a lawsuit by the Seneca and Cayuga nations which seeks to prevent the state from imposing its $4.35-per-pack sales tax on cigarettes destined for reservation smokeshops.

In the meantime, the judge extended a temporary order issued last week barring collections at least through next week's hearing. The order had been set to expire September 13.

Also Tuesday, the Oneida Indian Nation of central New York began its own federal challenge of the state tax law, filing a case in New York's northern judicial district, where the St. Regis Mohawk tribe also has a lawsuit pending.

State tax officials had planned to tax reservation sales to non-Native customers beginning Sept. 1 as a way to bring in $110 million in revenue this fiscal year and $200 million a year after that.

TODAY - A five-judge panel from the state 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. (New York State - cigarette tax collection from Native American sales pushed off until 5-judge panel decides..) It is not clear how soon a decision will be issued.


Indian nations oppose the plan as an attack on tribal sovereignty and treaty rights.

The state's last attempts to tax reservation sales, in 1997, led protesters to set fires that stopped traffic on the New York State Thruway where it runs through the Senecas' Cattaraugus territory.

The current efforts seek to keep tax officials off the reservations by having cigarette wholesalers prepay the sales taxes before supplying Native American stores. Wholesalers would pass along the charge to tribal retailers, who in turn would have to raise their prices and lose their competitive edge over off-reservation convenience stores.

Although Arcara's order covers only the two western New York tribes, a separate order by a state judge continues to bar the tax for all nine New York tribes in the tax-free cigarette business. A five-judge appellate panel in Rochester is scheduled to take up that case Thursday.

The state case was brought by a Seneca retailer and a non-Indian cigarette wholesaler. The wholesaler said he would lose business if forced to collect the tax on cigarettes he supplies to reservation stores.

Reference: Federal judge extends order barring state tax on some cigarette sales by 2 NY Indian nations by Carolyn Thompson, CanadianBusiness.com, 9/8/2010.

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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..;
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New York State - Seneca Indian Nation files sued to block enforcement of a plan to collect cigarette taxes..;