A federal appeals court on Monday lifted legal stays that have been blocking New York's effort to collect taxes on cigarette sales by Indian-owned businesses to non-Indians.
The U.S. Court of Appeals for the 2nd Circuit ruled that five New York-based Indian nations challenging the state's collection plans in court haven't demonstrated that they're likely to win by arguing that the taxing system unduly burdens reservation retailers and interferes with tribal sovereignty.
"We will now begin the implementation phase as we move to collect these taxes," said Gov. Andrew Cuomo, who was attorney general when the lawsuits were filed.
Current Attorney General Eric Schneiderman called the ruling "an important victory for the state to collect deserved revenue and to protect public health."
State officials, facing a $9.2 billion budget deficit, voted last June to begin collecting the $4.35-per-pack sales and excise taxes on the millions of cartons sold on reservation smoke shops to non-Indian customers. It was a break from the policy known as forbearance adopted by a string of governors who declined to enforce state laws requiring the taxation of sales to the general public.
The state anticipated collecting $500,000 a day in new tax revenue beginning Sept. 1, 2010, but has been stalled by the legal challenges.
The Seneca Nation, whose 172 tobacco retailers sell more