The saga continues. A federal judge has delayed a final ruling for two weeks on imposing a sales tax – originally slated to start today – on cigarettes sold by the Seneca and Cayuga nations to non-Native customers.

The delayed ruling is prompting a business boom at the Native-owned shops as people stock up on cigarettes in anticipation of a $4.35-a-pack tax hike, WIVB reports.

Gwen Florio

Tags: buffalo post, Cayuga Nation, cigarette taxes, Gwen Florio, Native American news, New York, Seneca Nation, Tribal smoke shops, tribal sovereignty

n this Aug. 23, 2010 photo, a motorist enters a business on the Tonawanda Seneca Nation in New York. (AP Photo/David Duprey)

In this Aug. 23, 2010 photo, signs are posted on a bridge on the Tonawanda Seneca Nation in New York. Tensions are rising as the state nears the Sept. 1 start date to collect taxes on cigarettes sold by Indian tribes. The photo at left depicts New York Gov. David Paterson, while the photo at right depicts New York Mayor Michael Bloomberg. (AP Photo/David Duprey)

Judge Richard Arcara granted a request by the tribes for a court order that stops the state from imposing a $4.35 per pack sales tax on cigarettes sold by reservation retailers starting on Wednesday. The ruling delays those collections for at least two weeks. It wasn’t immediately clear if the state will go ahead with taxes on other tribes.

Attempts to collect the tax in the 1990s resulted in sometimes violent protests on Seneca lands.

The Senecas — the biggest player in the business — and Cayugas argued the policy change violates sovereign rights and will damage their economies.

The cash-strapped state sees the tax as a potential $200 million source of annual revenue.

Tags: buffalo post, Cayuga Nation, cigarette tax, David Paterson, Judge Richard Arcara, Michael Bloomberg, New York, Richard Arcara, Seneca Nation, Tribal smoke shops, tribal sovereignty

Cindy Ballagh, left, owner of a Traveling Smoke store on the Seneca Nation Cattaraugus Reservation, rallies in support of Cayuga Nation’s right to engage in free trade and commerce, in front of the Onondaga County Courthouse in Syracuse, N.Y., Thursday, March 25, 2010. (AP/Heather Ainsworth)

More than 100 people protested outside the New York Appeals Court today during a hearing on whether the state has the authority to tax Indian cigarettes.

Inside the courthouse, prosecutors contended that the state can both impose the tax, and prosecute those who sell tribal cigarettes to nontribal people without taxing the smokes, according to this Associated Press story by John Kekis and Michael Virtanen.

But Cayuga Nation attorney David DeBruin said that would violate tribal rights.

Outside, the Seneca Nation’s Arthur Montour Jr. told protesters that “We are being attacked today. We are nontaxable. We are not under the thumb of New York state. It’s up to us to decide. There is nothing to negotiate, no matter what those black robes say. We will be there to defend.”

As the AP reports:

More than one-third of the cigarettes sold in New York by licensed agents go without tax stamps to Native American merchants, according to state officials. If all were stamped and taxed, New York would have collected $825 million more in 2008. Seneca and Cayuga county officials estimate the Cayugas’s LakeSide Trading stores in Union Springs and Seneca Falls owe $485,000 in state excise taxes.

Laws requiring taxes on the cigarettes have been on the books for years, but the state never enforced them. Now, with New York looking to make up budget shortfalls due to the recession, the taxes are being eyed anew.

A ruling by the court is expected next month.

Gwen Florio

Tags: buffalo post, Cattaraugus Reservation, Cayuga Nation, Gwen Florio, Lakeside Springs, New York, NY, Onondaga County Courthouse, Seneca Falls, Seneca Nation, Sovereignty, tribal cigarettes