Judge denies Cayugas' request to sell tax-free cigarettes

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(AP) -- A request by the Cayuga Indian Nation to resume selling tax-free cigarettes has been rejected by a state judge.

The Central New York tribe was seeking an injunction barring Cayuga and Seneca counties from enforcing state tax laws regulating cigarette sales.

The nation was forced to stop selling cigarettes after sheriff's deputies in Seneca and Cayuga counties raided the tribe's Lake Side Trading convenience stores in Union Springs and Seneca Falls and seized 17,600 cartons of cigarettes on Nov. 25.

County officials said the stores were violating state law by selling cigarettes without charging the required tax and they owed $485,000 in state excise taxes.

The Cayugas argue they are a sovereign nation and exempt from state and local taxes. The Nation issued the following statement in regards to the judge's decision:

For four years, in good faith reliance on statements made by the Governor, the Department of Taxation, and the courts, the Cayuga Nation has sold cigarettes on its reservation, confident that it was doing so in full compliance with all applicable state laws.

In a sweeping and surprising decision issued today, a court has held for the first time that continuing such sales in the future would be unlawful under state law. The Cayuga Nation believes that the court's unprecedented decision is squarely at odds with both state and federal law, and the Nation intends to seek review in the appellate courts. In the meantime, the Nation intends to comply with today's decision while it seeks to vindicate its rights on appeal.

Information from the Associated Press was used in this report.