Court hears arguments in Indian cigarette sales tax dispute, former cop’s DWI sentencing deal

The state’s top judges grilled lawyers on both sides of the dispute over the collection of taxes on cigarettes sold by the Cayuga Indian Nation during a court session in Syracuse today.

Lawyer Philip Spellane had barely begun making his argument in support of Cayuga and Seneca county officials’ actions against two Nation stores when Court of Appeals Judges Robert Smith and Victoria Graffeo began firing questions at him.

Lawyer David DeBruin from Washington, D.C., arguing on behalf of the Cayuga Nation, also was peppered with questions during his time before the court.

Throughout the nearly hour-long legal argument, six of the seven judges of the Court of Appeals repeatedly interrupted the lawyers with questions about the legal status of the stores in question and the state’s decision not to implement a means to collect sales taxes for cigarettes sold to non Indians by the Cayuga Nation and other Indian nations.

Spellane contended the District Attorneys of the two counties were doing their jobs when they initiated a criminal case for the sales of unstamped cigarettes from the two stores. That prompted Graffeo to question why the district attorney’s should be doing something that the state has decided not to do regarding the collection of sales taxes.

Spellane contended the prosecutors were not bound by an administrative decision by a state agency such as the tax department when it came to enforcing state law.

If the Court of Appeals were to reverse the appellate court’s conclusion that the Nation stores were on “qualified reservation” land, then those stores would be subject to the same laws as convenience stores across the state that are obligated to collect state sales tax on cigarettes, he argued.

DeBruin contended retailers are obligated to collect the sales tax except on Indian land. He argued that the onus is on non-Indian purchasers of cigarettes on Indian land to pay the sales tax to the state not on the Nation retailers to collect the tax for the state.

DeBruin contended the counties’ position would make it illegal for all the state’s Indian nations to possess any unstamped cigarettes because the law establishing a coupon system for determining how many unstamped cigarettes can be made available for Nation members has never been implemented by the state.

That would improperly subject the leaders of the state’s Indian nations to prosecution by district attorney’s across the state, he contended.

DeBruin also argued that a finding that land is “qualified reservation” land does not require a finding that the land is sovereign Nation territory. Spellane contended only sovereign territory is exempt from the obligation to collect sales taxes for cigarette sales.

A trial level judge sided with Cayuga and Seneca counties in an initial ruling that a criminal prosecution for violating tax law was justified. The state Supreme Court Appellate Division in Rochester, however, reversed that ruling in a 4-1 decision, finding there was no basis for the imposition of a cigarette tax on a qualified reservation and no basis for a criminal prosecution for the sale or possession of unstamped cigarettes from the two Cayuga Nation stores.

A decision from the Court of Appeals is expected in about six weeks.

In a second case, the court heard legal arguments about the sentence for a former Syracuse police officer who pleaded guilty to vehicular assault and drunken driving charges in a head-on crash that seriously injured two teenagers in Clay in 2006.

Lawyer John Cirando argued the court could simply rule that the two one-year sentences Derek Backus agreed to serve in a plea bargain should be made to run concurrently instead of consecutively. An appellate court ruled running the sentencing consecutively was illegal but gave the District Attorney’s Office the option of backing out of the plea deal altogether.

Cirando contended the error resulted from a “mutual mistake” by the parties in arranging the plea deal.

Chief Assistant District Attorney James Maxwell disputed that characterization as he argued Backus should not get the benefit of a 50 percent reduction in his sentence by appealing the plea deal he agreed to in the first place.

The court is expected to have a decision in that case in about six weeks as well.


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