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Seneca Nation Sues NYS

CATTARAUGUS TERRITORY, N.Y.  -- The Seneca Nation of Indians called on New York Governor David Paterson and Attorney General Andrew Cuomo to delay the State's planned September 1 start of collection of tax on Native American-sold tobacco products, in order to allow legal actions to reach their conclusion.  In a letter to Paterson and Cuomo, Nation President Barry E. Snyder, Sr. set a Thursday deadline for the State to notify the Nation of its willingness to have the issue of the validity of the State's plan resolved in an orderly fashion, threatening additional legal action if the State is not willing to work with the Nation.

"We are asking the governor and attorney general to stand down and allow the court to handle this. We are trying to avoid needless tension and chaos that is likely to ensue if the state attempts to start collections on Sept. 1," President Snyder said.

In his letter, the Seneca leader cited the 'highly truncated' manner in which the state enacted its latest tobacco taxation legislation and the corresponding regulations.  Snyder is demanding an affirmative response by Thursday, August 19 to prevent additional legal action.

"The point of this letter is not to convince you of the merits of the Nation's arguments.  Rather, it is to suggest an orderly process by which the State and the Nation might seek to have the federal district court, as well as the state courts, address our dispute with the State's efforts impose its taxes in our Territories," Snyder wrote.

If the state can provide the assurances that it will not seek to enforce the new law and regulations on Sept. 1, the Nation is willing to establish a legal briefing and court schedule that would get this critical issue before the courts in a matter of weeks, according to Snyder.

"If they refuse to back down, we will have no choice but to return to federal court on Friday to file a motion for a preliminary injunction and/or a temporary restraining order," Snyder said.

The request is consistent with the Nation's and State's respective roles as sovereign governments entrusted with the mutual responsibility to "respect each other's interests and to ensure the peace and welfare of our peoples," Snyder wrote.

Earlier today the Nation filed a complaint in the United States District Court for the Western District of New York challenging as substantively infirm (1) the amendments to New York State Tax Law sections 471 and 471-e that were enacted on June 21, 2010; and (2) the emergency regulations promulgated by the Department of Taxation and Finance in an effort to implement those statutory provisions.  

The complaint charges the new legislative and regulatory provisions violate well-established federal law in several fundamental respects.

In addition to the federal court action, the Nation plans to file a motion to intervene in a pending State Supreme Court case "Day Wholesale et al v. State of New York," a matter that dates back to 2006. The sole purpose of the Nation's anticipated filing in theDay Wholesale case is challenging the procedure by which the new "emergency" regulations under the State Administrative Procedure Act were issued.

The basis for this challenge is fully set forth in the Nation's pre-suit Petition filed with the New York Department of State on July 30, 2010.  In the Day Wholesale case, the Department of Taxation and Finance has acknowledged that injunctions in place in that matter presently constrain it from enforcing the provisions of the State's tobacco tax laws on the Territories of the Indian Nations located in the State.  The State is seeking to have the Court lift the injunctions; the Nation will ask the Court to keep them in place given the procedural invalidity of the new State regulations.



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