BUFFALO, NY - A state judge gave the Seneca Nation a temporary victory over a New York state cigarette tax, barring its collection while the issue is litigated.
Judge Donna Siwek scheduled arguments for June 1, The Buffalo News reported. Her temporary injunction will remain in force until then.
A federal court ruled that New York state could start collecting taxes from sales on Indian reservations to non-Indians. The northern tier of the state has a number of reservations, including the Tonawanda and Tuscarora reservations, the Onondaga Indian Nation and the Mohawks, Oneida and Cayuga.
The sale of tax-free cigarettes has benefited not only the tribes involved but the owners and employees of a number of wholesalers in Buffalo and other upstate communities that have sprung up to supply them. Two wholesalers told the News they halted supplies after the federal court ruling.
Frank Attea of Attea Milhem & Bros. said he has $1 million in cigarettes in his Buffalo warehouse. But he is afraid if he sells the cigarettes, the state will eventually try to collect excise taxes amounting to $4.65 a pack.
Attea was a plaintiff in a lawsuit that ended in 1994 when the U.S. Supreme Court ruled for the state. Then-Gov. George Pataki gave up the attempt to tax Indian cigarettes in 1997 after angry protesters blocked the New York Thruway.