Indian Time - A Voice from the Eastern Door

A New York District Court judge has extended a temporary restraining order against the state of New York this week, preventing them from enforcing their Indian-sold cigarette taxation law until at least Nov. 12, 2010.

On Tuesday, Oct. 26, Judge Richard Joseph Arcara of the Western District Court heard preliminary arguments in the case and he later extended a previously installed temporary restraining order preventing the state from moving forward with the law’s implementation. He is expected to render his decision before Nov. 12, or grant another extension at that time.

The St. Regis Mohawk Tribe filed the request for a preliminary injunction based in part on their argument that it’s not the responsibility of tribes to collect the state’s tax. The law is targeted at reservation stores who sell tax-free tobacco to non-Native customers who do not have the same tax-exempt status as Natives. The law applies to major brands of tobacco only, not to Native-manufactured brands.

Tribes have argued that the state’s regulatory methods place a burden on tribal members as there is no way to ensure each member continues to have tax-free status when purchasing tobacco. One option the state has offered is a coupon system, in which tribes would be given coupons to hand out to tribal members for reimbursement of the tax they paid on cigarettes. The other option offered is an allotment system, The state would allow a set number of cigarettes to be sold tax-free to each tribe, based on the state’s calculation of how many cases of tobacco each tribal community purchases for themselves. That amount would be available for purchase through the wholesaler without the tax paid. However, one store could purchase the entire tax-free allotment. Both systems have been called “ludicrous” by tribes. The Akwesasne community met with tribal leaders and advised them not to agree to either system the state was suggesting and to instead fight the law’s implementation.