State relents after ruling on cigarette tax

Another day, another court ruling. But still no final decision.

A state appellate judge Wednesday temporarily pushed off the tax collection on Native American sales of cigarettes to non-Indians across New York.

A day after a federal judge granted a two-week reprieve in a related case, a spokeswoman for Gov. David A. Paterson said the state is standing down on the tax collections because of a stay issued Wednesday by Judge Samuel L. Green of the Fourth Department of the State Appellate Division.

cigarette tax

The order reinstated a temporary restraining order that had been issued by another state judge in January 2009, according to state officials.

A five-judge panel from the appellate court will consider the tax-collection issue in more depth next Thursday, said Margaret A. Murphy, the Buffalo attorney who persuaded Green to reinstate the restraining order Wednesday.

The governor’s office said the state is making efforts to have the injunction lifted once again but, in the meantime, will not enforce the cigarette tax collections against any tribe.

“We are disappointed today that the Appellate Division has stayed the implementation of our statute and regulations,” Paterson spokeswoman Jessica Bassett said.

Wednesday was when state officials had planned to start collecting a $4.35-a-pack sales tax on cigarettes sold to non-Indians. However, a ruling Tuesday by U.S. District Judge Richard J. Arcara temporarily blocked any collection at the Seneca and Cayuga territories.

The state case has bearing on tribal territories statewide.

“We asked Judge Green to reinstate the temporary restraining order, and he agreed to do so. We’re glad that he took the prudent measure of putting things back at the status quo so the judges can look at it next Thursday,” Murphy said.

Murphy represents Scott B. Maybee, a successful Seneca cigarette retailer, and Day Wholesale, a non-Indian cigarette wholesaling company located in Tupper Lake in the Adirondacks.

She said that both of her clients would suffer great losses of business if the state efforts go forward.

Senecas hold two rallies

“Scott Maybee recently had to lay off 120 of his workers, and he is trying to save 78 other jobs that still exist in his company,” Murphy said. “Peter Day is a wholesaler, and he would be the one forced to collect tax payments for the state if this law isn’t stopped.”

In a written statement after Wednesday’s decision, Seneca Nation President Barry E. Snyder Sr. said, “We are extremely relieved that now all Indian nations within New York are protected from the state’s collection efforts, while efforts continue in both state and federal courts to continue our challenge of the state’s misguided taxing scheme.”

The complicated web of legal cases continued to unfold as a cry for the state to stop attacking the sovereignty of Native American nations came from the Cattaraugus Reservation on Wednesday.

News of the judicial decision followed two rallies on Seneca territory, organized to give people a chance to express their frustration with the continuing struggle.

Seneca Nation Tribal Councillor Travis Jimerson told a crowd of about 100 at one of the morning rallies that he wanted to remind the state and state leaders that New York “was built around us.”

“They never beat us. They never removed us,” Jimerson said. “We’re a nation that’s never been beat. Many have tried, and they failed.”

A 90-minute rally at Big Indian Smoke Shop on Milestrip Road, organized by the Seneca Free Trade Association, was held to “give folks a chance to get out and express themselves, express the frustration that we’re all feeling over what’s being done to us,” said Richard Jemison, the group’s chairman.

The other rally was held at the same time at Native Pride, a smoke shop and gas station on Route 20.

Several speakers at the rally at Big Indian criticized some elected officials — Paterson, New York City Mayor Michael R. Bloomberg and President Obama.

Signs displayed at the rally included one with a doctored photo of Obama smoking a cigarette with the words, “No more lies.”

Another showed a doctored photo of Paterson with a cowboy hat and a revolver saying, “I’m hunting Indians. You see any?”

A third depicted Bloomberg with a shotgun and a cowboy hat along with the hammer and sickle logo of the former Soviet Union. The sign characterized the mayor as “Cowboy Bloomberg.”

Issue of ‘human rights’

On Aug. 13, Bloomberg on a radio show encouraged Paterson to “get yourself a cowboy hat and a shotgun” to collect taxes on cigarette sales in Indian territories.

On Aug. 26, Paterson renewed a pledge to collect the tax, acknowledging “violence and death” could result.

Ross John, a Seneca businessman, said the dispute over cigarette taxation amounted to the state trying to balance its books. “We’re not asking for crazy things. We’re asking for human rights,” said John, a member of the Beaver Clan of the Seneca Nation who lives on the Cattaraugus territory.

Jimerson noted the honking vehicles passing by the rally site, which abuts the Thruway.

“Every time you see one of those cars go by, that’s two bucks to us,” Jimerson said.

A 2.7-mile portion of the Thruway, from Exit 57A at Eden-Angola to Exit 58 at Silver Creek, is on Seneca territory.

In 2007, then-Gov. Eliot L. Spitzer put $200 million in his budget from revenue he was going to collect in taxes from non-Indians who buy cigarettes and gasoline on Seneca territories.

Shortly after that was announced, the Seneca Nation sent the state a $2.6 million bill for cars that used the Thruway crossing Seneca land over a two-month period.

Wednesday’s appeals court ruling supersedes a decision issued Monday by State Supreme Court Justice Donna M. Siwek. She had lifted an injunction that had been issued by another judge, prohibiting the taxation of Indian cigarette sales.

State’s promises cited

That injunction was issued by State Supreme Court Justice Rose H. Sconiers in January 2009, in a Seneca tobacco case. She has since become an appellate judge.

The latest rulings continue a legal battle that has been waged since the early 1990s.

Richard Nephew, a member of the Seneca Nation Tribal Council, told the crowd at the rally at Big Indian that he believes that the media rarely point out what the state owes the Seneca Nation, instead focusing on what the nation owes the state. The state made promises in 1976 surrounding the construction of Route 17, which crosses the Allegany territory, Nephew said. “We’re still waiting for those promises to be kept,” he said.

Nephew also called the Thruway that runs through the Cattaraugus territory “an illegal business conducted by New York state on our territories.”

State officials hadn’t interfered with commerce on the Tuscarora Reservation by the time the latest injunction was issued, said Lisa Clause, an employee at Jay’s Place on Walmore Road.

Clause said the Tuscaroras went to court seeking their own injunction after one was granted to the Senecas and Cayugas.

She also expressed doubts that concerns over violence spurred the latest delay.”They have far more officers than we have Native Americans,” she said. “It’s not fear keeping the tax from going through; it’s the law.” “We will never pay New York State taxes,” she said. “Never.”

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