N.Y. Top Court Weighs Tax Claim On Indian Cigarettes

New York state and county attorneys argued last week in New York’s top court that the government can lawfully tax Indian cigarette and prosecute sellers of untaxed smokes, The Associated Press reports.


The Cayuga Indian Nation, in response, argued that such actions encroach on tribal rights and that the Cayugas do not have to collect the tax for the state from non-Indian smokers. "The liability for the tax is on the consumer," an attorney for the Cayugas said.


More than one-third of the cigarettes sold in New York go without tax stamps to Native American merchants, state officials said. If all were stamped and taxed, New York would have collected $825 million in revenue in 2008.


Governor Paterson has proposed enforcement rules that would limit supplies of tax-free reservation cigarettes to those for use by tribal members only.


The court is expected to rule on the issue, which has been a long and contentious one, next month.