Skip to main content

Judge rules Cayuga cannot sell untaxed cigarettes

AUBRUN, N.Y. – The Cayuga Indian Nation said it will appeal a federal judge’s ruling that it does not have the right to sell untaxed cigarettes at two tribal convenience stores on its reservation – land that the court denies is Indian country.

In a 30-page decision issued Dec. 9, New York Supreme Court Justice Kenneth R. Fisher sided with Cayuga and Seneca county law enforcement officials’ claims that the two convenience stores they raided recently are not on sovereign territory or on a “qualified reservation” and, therefore, the tribe cannot exercise the sovereign right of Indian nations to trade tax free on their lands.

The nation was forced to stop selling cigarettes Nov. 25 after Seneca and Cayuga county sheriff’s deputies raided the tribe’s Lake Side Trading convenience stores in Union Springs and Seneca Falls and seized 17,600 cartons of cigarettes.

Cayuga issued the following statement in response to Fisher’s ruling:

“For four years, in good faith reliance on statements made by the Governor, the Department of Taxation, and the courts, the Cayuga Nation has sold cigarettes on its reservation, confident that it was doing so in full compliance with all applicable state laws.

“In a sweeping and surprising decision issued today, a court has held for the first time that continuing such sales in the future would be unlawful under state law. The Cayuga Nation believes that the court’s unprecedented decision is squarely at odds with both state and federal law, and the Nation intends to seek review in the appellate courts. In the meantime, the Nation intends to comply with today’s decision while it seeks to vindicate its rights on appeal.

Fisher’s ruling escalates the mounting cigarette tax war between local officials and tribal. At the core of the issue is the question of tribal sovereignty on tribal sovereign land.

County officials claimed the nation violated state law by selling cigarettes without charging the required tax and owed $485,000 in state excise taxes. The judge agreed that they have the right to impose state laws on the stores.

District attorneys for both counties responded triumphantly to Fisher’s ruling.

“We were right. It’s not a reservation, not a qualified reservation and there’s no law that allows Lakeside Trading to sell unstamped cigarettes,” Seneca County District Attorney Richard E. Swinehart said.

The DA’s said they would go to a grand jury to press felony charges, but it was not clear against whom the charges would be filed; filing against the Cayuga Nation would seem to confirm the tribe’s sovereign status and its claims over the lands.

County officials said the ruling would help pressure New York Gov. David Paterson into taking action against the tribes.

A statement issued by Paterson’s office last week said that the governor “is currently engaged in comprehensive negotiations with the various Indian Nations in New York state with the desire to reach workable and realistic solutions that will benefit all New Yorkers. New York’s governors have faced these issues for decades with no resolution, and it is Gov. Paterson’s firm belief that we must fundamentally change the way we approach these problems.

The Cayugas and other Indian nations in New York say they are exempt from collecting sales and excise taxes because their businesses are protected by their sovereign nation status.

Cigarette sales to tribal members on reservations are not taxable by law, but legislators have been trying for years to force tribal smoke shops to collect taxes on cigarettes sold to non-Indians. The tribes say they are not obligated to act as tax collectors for the state. According to state law, non-tribal members who buy cigarettes on reservations are obligated to report and pay the taxes on those purchases.

Fisher’s ruling denied a request from Cayuga attorneys for a preliminary injunction to allow the nation to continue selling cigarettes. The motion also asked for a declaration that the tribe was not in violation of the state’s tax laws, and for an order stopping county officials from saying the tribe was breaking the law until a particular tobacco tax law amendment – 471-e - goes into effect.

The 471-e law says in part “The Indian nations or tribes specified in paragraph (2) of this subdivision are exempt from the sales and use tax on purchase of tangible personal property, services, food and drink, hotel occupancy, or admissions and dues.”

The Cayugas are listed in Paragraph 2 along with eight other “Exempt Tribes and nations.” Nation attorneys argued that if the defendants claim the nation has no qualified reservation,” it would make little sense for the statute specifically to include the Cayuga on its list of tribes and nations to whom to provisions of 471-e apply. Clearly, the statute presupposes that the Cayuga nation has qualified reservation land.”

The nation argued that it “clearly” operates on land that falls within the definition of “qualified reservation.”

The land in question “is held by the Cayuga Nation and is located within its historical reservation. That reservation has never been disestablished by an act of Congress. … Defendants cannot argue that the land in question is not held by the Cayuga Nation subject to restraints by the United States against alienation or in trust by the United States for the benefit of the Cayuga Nation,” the attorneys said.

Fisher did not accept that argument or the tribe’s contention that 471-e applies in this case. Instead, he turned to a 2005 U.S. Supreme Court ruling. City of Sherrill, New York vs. Oneida Indian Nation, to support his decision

In Sherrill, the high court ruled in essence that the Oneidas could not unilaterally assert control over their own land because it would disrupt the lives of white people who have exercised jurisdiction there for so long; the nation had waited to long to make its claim, the high court said.

In justifying its decision, the court referenced the 15th century Doctrine of Discovery – the discredited European racist and Christian supremacist foundation for settler colonialism and conquest all over the world.

“To apply the phrase ‘qualified reservation’ in 471-e to the patchwork of parcels recently acquired by the Cayuga Indian Nation” would be “to sanction” the result that the Sherrill case rejected, Fisher wrote.

Mark F. Emery, director of media relations at the Oneida Nation Public Affairs Department, issued the following comment on Fisher’s decision:

“Although there were several flaws in the ruling, it specifically recognizes that the Oneida Nation has a qualified, recognized reservation in the State of New York. Madison and Oneida counties are bound by federal court rulings, and by state law cited in today’s decision, which have acknowledged the ongoing existence of the Oneida reservation.

“It would be devastating to the local economy and our nearly 5,000 employees, for reasons far beyond cigarette sales, for anyone to suggest that the Oneidas lack a reservation. Therefore, while the decision is unfortunate because it ignores elementary legal rules, it should not be read to apply beyond the circumstances of the Cayuga Nation,” he said.

Scroll to Continue

Read More