ALBANY - New York State Supreme Court Justice Donna Siwek ruled in favor of New York State and against the Seneca Indian Nation on Wednesday in a decision that clears the way €" for now €" for the Cuomo administration to begin pre-collecting state excise and sales taxes on cigarettes sold by wholesale distributors to tribal enterprises.
Lifting a preliminary injunction she had imposed three weeks ago, Judge Siewk rejected the Senecas€™ claims that the state failed to follow state procedural requirements in adopting regulations spelling how the taxes on Indian sales to non-Indian customers would be collected and how the undisputed tax exemption on Indian sales to tribal members would be preserved.
Jim Calvin, president of the New York Association of Convenience Stores, hailed the court ruling and urged Gov. Cuomo to immediately begin tax collection, as he has pledged to do. Sales of cigarettes in tax-collecting stores have plummeted over the last 10 years as a series of state excise tax hike increases drove more and more non-Indian smokers into the arms of tribal competitors who enjoyed a dramatic and artificial price advantage because they excluded over $5.00 a pack in state taxes.
"It is conceivable that the Senecas will appeal this ruling, commence some new legal action, or try some other maneuver to prevent the state from moving forward with enforcement," Calvin said, "but ultimately the law is the law, and the state has the right to collect these taxes."
A copy of Judge Siwek's ruling is attached.