Cigarette tax banned until Oct. 1

Every Native American tribe in New York State now has at least temporary protection from state taxation of cigarette sales to non-Indians.

U. S. District Judge Lawrence E. Kahn, based in Albany, ruled Thursday that the state cannot tax cigarette sales by any tribe until at least Oct. 1.

Kahn’s ruling came after the St. Regis Mohawks filed an action in his court similar to one filed in Buffalo by the Senecas and Cayugas.

In Buffalo, District Judge Richard J. Arcara has barred the state from collecting cigarette taxes on sales by only the Senecas and Cayugas until at least Oct. 15.

“Judge Kahn’s ruling is great news for all the tribes, because it protects everyone, including suppliers who sell cigarettes to the Indians,” said Margaret A. Murphy, a Buffalo lawyer who represents a Seneca Nation cigarette company and a cigarette wholesaler in Tupper Lake.

Murphy said Marsha Schmidt, a Washington, D. C., lawyer for the St. Regis Mohawks, presented “a very strong argument” claiming that the state’s cigarette tax plan violates the sovereign rights of tribes.

“Her argument focuses on different issues than the issues that are being litigated in Buffalo,” Murphy said.

Lawyers from the state Attorney General’s office argue that there is nothing illegal about the state’s efforts, which state officials believe could result in hundreds of millions of dollars in revenues annually.

Many people on both sides of the dispute believe it will eventually be argued before the Second Circuit federal appeals court, and ultimately, in the U. S. Supreme Court.


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