Judge declines to block state tax on cigarettes
Mon, 30 Aug 2010 21:24:28 GMT —
A state judge refused Monday to block New York from taxing reservation cigarette sales to non-Indian customers, sending Indian tribes back to federal court for a last-minute attempt to stop the legislation from taking effect.
Supreme Court Justice Donna Siwek cleared the way for New York to begin imposing its $4.35 per pack sales tax beginning Wednesday when she granted the state's motion to lift a 2009 preliminary injunction, as well as a 2007 order, that had blocked the tax because there was no regulatory scheme in place.
Legislation passed in June addressed the regulatory issues, eliminating the need for the orders, Siwek said in a ruling from the bench.
A lawyer for the Seneca Indian Nation of western New York had argued the orders should remain in place because state tax officials circumvented proper procedures by adopting the regulations on an emergency basis.
Siwek said tight deadlines necessitated the rush.
"The Department of Taxation and Finance was under a clear legislative directive that it could not ignore," Siwek said.
The decision shifted the debate over whether to tax reservation sales back to federal court, where lawyers for the Seneca and Cayuga Indian Nations will appear Tuesday on their earlier request for a temporary restraining order that would allow them to continue to sell cigarettes tax-free while they challenge the state's plans.
Gov. David Paterson has vowed to begin taxing reservation sales to non-Indian customers to help close a mammoth budget gap, estimating $200 million in yearly revenue.
But tribes argue that the plan would infringe on their sovereignty and could doom their economies.
The last time the state tried to collect the tax, in 1997, protests erupted and tires were burned on the Thruway, shutting down a 30-mile stretch of the state's main thoroughfare that bisects Seneca land south of Buffalo.
On Monday, however, Seneca President Barry Snyder Sr. said the 7,800-member nation is committed to peace and said tribal leaders have been meeting with federal, state and local law enforcement agencies to keep the lines of communication open.
"Everyone's top goal is the public safety of our community and the surrounding communities," Snyder said.
Paterson, meanwhile, who said last week that state police had warned of the potential for "violence and death," said Monday he does not anticipate problems.
"This decision does not involve New York state in any way .... going on Indian nations, which is sovereign territory," he said. "We are taking an action on our own territory involving the way taxes are collected."
Paterson will require cigarette wholesalers to prepay the taxes before supplying reservation stores. He said state troopers will be kept off the state's Indian reservations to avoid conflict.