Court issues restraining order on cigarette tax collection

St. Regis Mohawk Tribe Press Release — On December 24th, State Supreme Court Justice Rose Sconiers issued a temporary restraining order barring the state of New York from enforcing state tax law restricting the sale of unstamped cigarettes at the wholesale level to cigarette retailers on Indian reservations.  Governor Paterson had recently signed the legislation to allow the state to collect sales tax on non-Indians purchasing cigarettes at Indian smoke shops. “This temporary restraining order is a relief to us, but I would like to see a permanent restraining order imposed,” said Tribal Chief Barbara Lazore.  “This persecution of our businesses and interference in our sovereign right on how we conduct business within our reservation must cease.  We have never collected taxes for New York State and do not plan to do so now.  I question whether New York State would be willing to remit the taxes they collect from our people within their jurisdiction to our Tribal Government.”

“We are a major part of the North Country economy,” said Tribal Chief James Ransom.  “The backbone of any community is its small businesses.  We are no different and our Tribal businesses contribute in significant ways to local and regional economies around us.”  Almost two dozen retail businesses sell cigarettes on the reservation and they employ many workers as well as buying most of their goods and services from neighboring communities.

“Taxing cigarettes will not help the North Country or us,” said Chief Monica Jacobs.  “We’re glad that Justice Sconiers has issued this restraining order because respecting tribal sovereignty is essential.”  A 2006 tax law required all cigarettes sold on reservations to be tax stamped and imposed a coupon system.  But the tax department never developed the coupon system, so the law could not go into effect.

“Revenues paid to the Tribe from local tobacco retailers help support various programs and services provided to tribal members where little or no state or federal funds are available,” noted Steve Cook, Director of Economic Development for the St. Regis Mohawk Tribe.  “Just as important, business activity here at Akwesasne benefits the Malone and Massena economies.”