Tribes win temporary stay on cigarette tax

BUFFALO, N.Y., Sept. 1 (UPI) -- A federal judge temporarily blocked New York state Wednesday from collecting taxes on cigarettes sold by Indian tribes.

U.S. District Judge Richard Arcara issued a temporary stay Tuesday after the Seneca and Cayuga nations challenged the state's decision to extend cigarette taxation, Newsday reported. He expanded his order Wednesday to other tribes.

The two tribes argue that treaties signed in the early years of the American republic bar the state from taxing Indian cigarettes, The Buffalo News said. Indian leaders accuse state officials of trying to balance the budget at their expense.

"Judge Arcara's ruling sets the stage for an orderly and thoughtful legal review of what we believe is an illegal, ill-conceived attempt by New York State to use the Seneca Nation and other Indian Nations ... as piggy banks to balance the state budget," Seneca President Barry E. Snyder Sr. said.

The money involved is important to both sides and selling untaxed cigarettes, saving buyers $4.35 a pack in New York, has brought thousands of jobs to Indian reservations. Andrew Bing, a state official, estimated Monday that taxing Indian cigarettes would bring in $110 million in six months.

J.C. Seneca, a tribal leader and successful cigarette retailer, said if the tribe loses on taxation the Senecas will sell only cigarettes manufactured on the reservation. He said the tribe members will never concede the state's right to tax them.