New York Court Allows Resumption of Tax Collection on Tribal Sales

For now, the state can resume collecting taxes on Indian cigarette sales to non-Indian customers.

June 22, 2011

ALBANY €" The on-again/off-again enforcement of tax collection in Indian sales of cigarettes to non-Indian customers in New York is on again €" for now €" following a ruling yesterday by the Appellate Division of State Supreme Court.

Sitting in Rochester, the mid-level court panel upheld a lower-court ruling that the state followed proper procedures in adopting regulations governing the collection of such taxes. It lifted the previous restraining order imposed by one of its judges. Thus, for the moment, the Cuomo administration can resume enforcement. However, the plaintiff €" the Seneca Indian Nation €" vowed to seek permission to appeal to the state's highest court, the Court of Appeals.

"This extends a long string of federal and state-level court rulings that New York is entitled to collect taxes when non-Indian customers buy cigarettes from tribal enterprises," said James Calvin, president of the New York Association of Convenience Stores, which filed a friend-of-the-court brief opposing the Senecas' legal challenge. "The law is the law, and it needs to be enforced fairly in the interest of small businesses, taxpayers and public health. Let's get on with it."

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