Post by Okwes on Mar 22, 2007 14:10:33 GMT -5
Judge says no to taxes on Indian cigarettes
Business First of Buffalo - by Jodi Sokolowski Business First
A state Supreme Court judge ruled that the state cannot collect taxes from cigarettes sold on Indian reservations in New York.
Judge Rose Sconiers issued a preliminary injunction Jan. 2 barring the state from enforcing controversial tax amendments to Tax Law Section 471-e. She found that the tax law was not in effect due to the state's failure to create a fair tax exemption system for Native Americans and other deficiencies.
In the case of Day Wholesale Inc. and Scott B. Maybee v. State of New York, it is stated that "the order to show cause seeks a preliminary injunction enjoining enforcement of Tax Law Section 471-e until certain actions are taken, including the issuance of enabling regulations and the distribution of Indian tax-exempt coupons."
"This injunction ... shines a bright light on the illegitimate tactics that are being used in an attempt to stifle a legitimate industry," said one of the plaintiffs, Scott Maybee, in a prepared statement. "We hope this injunction and the flaws that were highlighted in the judge's decision will signal to policymakers that these issues can only be resolved by consultation and cooperation."
Maybee, a founding member of the Association of Responsible Cigarette Sellers, owns a mail-order cigarette business that operates on the Seneca Indian Nation territory.
In the decision, Sconiers noted that in order for the tax law to function, "it is essential that the state issue Indian tax exemption coupons."
She stated that "while the intent of the statute is to require non-Indians who purchase cigarettes on Indian reservations pay the state stamp tax, the statute can only function if it properly exempts Indians purchasing cigarettes under circumstances where they are not lawfully required to pay such taxes."
The lead plaintiff said the decision confirms that this law was never in effect. Peter Day is the owner of Day Wholesale, a cigarette wholesaler based in Tupper Lake.
"Efforts to portray businesses such as mine as violating the law were flat out wrong. For 50 years, my family has worked hard to build a business whose good reputation was based on honest dealing," he said in a prepared statement. "I am pleased that the court has vindicated our position."
The injunction, which follows a temporary restraining order granted Aug. 17, is a potential obstacle to Gov. Eliot Spitzer's stated goal of collecting taxes on reservation sales. A spokesman for Spitzer said Monday there is no comment at this time because the decision is still under review by the governor's office.
Taxes have never been collected on the sales of any goods on reservation lands. The Seneca Nation and members of the Iroquois Confederacy have long claimed that their treaties do not allow New York state to enforce its civil laws on their tribal lands.
At a Monday press conference in the Buffalo Mayor Byron Brown's office, Attorney General Andrew Cuomo commented on the decision.
"The law is the law and you have to enforce the law," Cuomo said . "The sales tax has to be collected. The law is fundamentally clear."
Business First reporter Jim Fink contributed to this article.
Business First of Buffalo - by Jodi Sokolowski Business First
A state Supreme Court judge ruled that the state cannot collect taxes from cigarettes sold on Indian reservations in New York.
Judge Rose Sconiers issued a preliminary injunction Jan. 2 barring the state from enforcing controversial tax amendments to Tax Law Section 471-e. She found that the tax law was not in effect due to the state's failure to create a fair tax exemption system for Native Americans and other deficiencies.
In the case of Day Wholesale Inc. and Scott B. Maybee v. State of New York, it is stated that "the order to show cause seeks a preliminary injunction enjoining enforcement of Tax Law Section 471-e until certain actions are taken, including the issuance of enabling regulations and the distribution of Indian tax-exempt coupons."
"This injunction ... shines a bright light on the illegitimate tactics that are being used in an attempt to stifle a legitimate industry," said one of the plaintiffs, Scott Maybee, in a prepared statement. "We hope this injunction and the flaws that were highlighted in the judge's decision will signal to policymakers that these issues can only be resolved by consultation and cooperation."
Maybee, a founding member of the Association of Responsible Cigarette Sellers, owns a mail-order cigarette business that operates on the Seneca Indian Nation territory.
In the decision, Sconiers noted that in order for the tax law to function, "it is essential that the state issue Indian tax exemption coupons."
She stated that "while the intent of the statute is to require non-Indians who purchase cigarettes on Indian reservations pay the state stamp tax, the statute can only function if it properly exempts Indians purchasing cigarettes under circumstances where they are not lawfully required to pay such taxes."
The lead plaintiff said the decision confirms that this law was never in effect. Peter Day is the owner of Day Wholesale, a cigarette wholesaler based in Tupper Lake.
"Efforts to portray businesses such as mine as violating the law were flat out wrong. For 50 years, my family has worked hard to build a business whose good reputation was based on honest dealing," he said in a prepared statement. "I am pleased that the court has vindicated our position."
The injunction, which follows a temporary restraining order granted Aug. 17, is a potential obstacle to Gov. Eliot Spitzer's stated goal of collecting taxes on reservation sales. A spokesman for Spitzer said Monday there is no comment at this time because the decision is still under review by the governor's office.
Taxes have never been collected on the sales of any goods on reservation lands. The Seneca Nation and members of the Iroquois Confederacy have long claimed that their treaties do not allow New York state to enforce its civil laws on their tribal lands.
At a Monday press conference in the Buffalo Mayor Byron Brown's office, Attorney General Andrew Cuomo commented on the decision.
"The law is the law and you have to enforce the law," Cuomo said . "The sales tax has to be collected. The law is fundamentally clear."
Business First reporter Jim Fink contributed to this article.