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Old 12-29-2008, 04:31 AM   #1
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Ruling bars cigarette tax on sales by Indians

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FROM: _http://www.buffalonews.com/cityregion/story/532934.html_
(Ruling bars cigarette tax on sales by Indians : City & Region : The Buffalo News)

12/26/08 05:36 AM
Ruling bars cigarette tax on sales by Indians
Restraining order issued against state
By Brian Meyer
NEWS STAFF REPORTER


The state is facing a new legal hurdle in its effort to collect taxes on
cigarettes sold on Indian reservations.

A judge has issued a ruling that would temporarily block the state from
enforcing a new tax policy.
An attorney for a Seneca tobacco retailer and a northern New York tobacco
wholesaler said State Supreme Court Justice Rose H. Sconiers issued a temporary
restraining order Wednesday. The ruling directs state officials to appear in
court again Jan. 27 to explain why the judge shouldn’t issue an injunction
barring the tax collection.
Margaret A. Murphy, a former Buffalo city judge who is representing Seneca
tobacco merchant Scott Maybee and Day Wholesale of Tupper Lake, said she is not
surprised by the ruling. Murphy played a key role last year in derailing New
York’s last attempt to collect taxes on tobacco sold on Indian reservations.

While she said the case might seem complex to some people, Murphy insisted
the issue can be boiled down to a few simple facts. One key factor, she said,
is that state officials have yet to develop a system of rules and regulations
for tax collections on reservations. For example, she said the state has not
set up a process for providing rebates to Native Americans who pay taxes on
cigarettes bought in reservation stores.
Murphy criticized state officials for creating an “us vs. them” scenario in
the long-festering dispute over whether taxes should be collected on
reservation sales. Murphy said other states have “shown respect for the sovereignty
of tribal governments” and have negotiated tax compacts with tribal leaders.
Officials in New York have taken another tactic, said Murphy.
“You can’t point to [reservation] retailers and wholesalers, call them
criminals, then expect them to come to the table,” Murphy said.
Officials from the state attorney general’s office could not be reached to
comment Thursday.
Earlier this month, Gov. David A. Paterson signed legislation requiring
cigarette wholesalers to prove to manufacturers that they are complying with
rules that require the payment of taxes on tobacco sold to non-Native Americans.
Murphy said there are “defects” in the legislation slated to take effect in
mid-February.
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