Syracuse, NY - Three court decisions in three days left New York right where it’s been for more than a decade: Not collecting taxes on cigarettes sold at Indian reservations. On the day a new enforcement plan was supposed to go into effect, a state appeals judge today halted the plan until a five-member panel of judges can review the...
Syracuse, NY - Three court decisions in three days left New York right where it’s been for more than a decade: Not collecting taxes on cigarettes sold at Indian reservations.
On the day a new enforcement plan was supposed to go into effect, a state appeals judge today halted the plan until a five-member panel of judges can review the case Sept. 9. Judge Samuel Green, who sits on the appeals court in Rochester, put on hold a ruling made by a state Supreme Court justice on Monday that would have allowed the state to begin enforcement.
In between those two rulings was a federal court decision that prevented the state from enforcing the law on sales at the Cayuga and Seneca reservations.
All enforcement of the law has been put on hold, said Brad Maione, spokesman for the state Department of Taxation and Finance.
The state had prepared a website for wholesalers to place orders for tribes, but had taken no other enforcement actions before today’s ruling, Maione said.
The state tax department had planned to require wholesalers to pay taxes upfront before selling cigarettes to Indian retailers. The tribes say it violates their sovereignty and threatens their financial well-being.
The court cases revolved around whether the state adequately provided a simple way for Indians to buy cigarettes tax-free. Tribes argued that the state’s allotment and coupon systems were cumbersome and turned tribal retailers into tax collectors for New York.
New York hiked its cigarette tax by $1.60 a pack on July 1, giving the state the highest cigarette tax in the country at $4.35 a pack.
Today, the state association of convenience stores called on Gov. David Paterson to stop collecting the recent increase. Jim Calvin, president of the state association, said stores across the state have lost 25 to 45 percent of their cigarette sales since the increase went into effect.
The appeals court ruling came in the case of Day Wholesale, which supplied about 8 million cartons of tax-free cigarettes to four tribes last year, according to the state tax department. An Erie County judge stopped the enforcement then, and again in 2009, before agreeing Monday to let the tax collection proceed.
’’It’s just where we’ve been for the past four years,” said Margaret Murphy, the attorney for Day Wholesale.
Contact Glenn Coin at gcoin@syracuse.com or 470-3251.