Cayuga and Seneca counties are following through on their plan to ask the U.S. Supreme Court to decide their cigarette tax dispute case with the Cayuga Indian Nation. The counties have until Monday to file a formal request asking the nation’s top court to hear their appeal, and Philip Spellane, the counties’ lawyer, said last week he would meet that...
Cayuga and Seneca counties are following through on their plan to ask the U.S. Supreme Court to decide their cigarette tax dispute case with the Cayuga Indian Nation.
The counties have until Monday to file a formal request asking the nation’s top court to hear their appeal, and Philip Spellane, the counties’ lawyer, said last week he would meet that deadline.
In May, the state Court of Appeals dealt a serious setback to the counties when it ruled the Cayugas could not be prosecuted for selling tax-free cigarettes to non-Indians at their LakeSide Trading stores in Union Springs and Seneca Falls. In a 4-3 decision, the state’s highest court sided with the Cayugas because it said the stores lie on qualified reservation land under state tax law and because there is no state system in place to collect sales tax on their cigarettes.
Spellane said the counties contend the court of appeals, however, erred in ruling the stores are on reservation land.
“We believe the (court of appeals) relied on an interpretation of federal law that we believe is incorrect....This is not sovereign land and should not be treated as sovereign land,’’ Spellane said.
Daniel French, one of the Cayugas’ lawyers, said the counties are wasting their money by continuing the legal fight.
“With all due respect it is a fool’s errand and further evidence of the counties’ willingness to throw good money after bad. It was a New York state court ruling on a New York state issue of law,’’ French said.
The counties say the Cayugas have an unfair competitive edge over tax-paying businesses that have to remit the tax and charge higher prices for their cigarettes. Both LakeSide Trading stores are on the Cayugas’ original 64,000-acre homeland around the north end of Cayuga Lake, which the Cayugas say makes for sovereign, tax-free land by federal treaty.
“It is a legal reservation,’’ said Clint Halftown, the nation’s federally recognized representative.
The Cayugas have acquired hundreds of acres that comprise some of their aboriginal territory and the nation has asked the federal government to place 125 of those acres into federal trust, which would make them tax-free forever. The Bureau of Indian Affairs has yet to rule on that request, which the counties and state both oppose.
The Supreme Court hears only about one in every 100 requests for appeal but Cayuga County Legislature Chairman Peter Tortorici said he believes the legal costs spent on the appeal application would be worth it in the long run if the counties were to win the challenge.
In addition, winning the tax dispute could help the counties block the Cayugas’ land trust application if the nation’s top court were to rule the land on which the LakeSide Trading stores lie is not sovereign, he said.
“This is not about winning to collect the sales tax because if that land is allowed to be put into federal trust it’s all over. Forget about it,’’ Tortorici said.
You can reach Scott Rapp at srapp@syracuse.com or 289-4839