News: NY Indian Tribes Rally

Court rules Cayugas cannot be charged with cigarette tax crimes

by Scott Rapp / The Post-Standard
January 22, 2009

Auburn, NY — A state appellate court on Wednesday ruled the Cayuga Indian Nation cannot be criminally charged for not paying cigarette taxes at its Finger Lakes stores.

The court granted the Cayugas’ request for a preliminary injunction, which temporarily blocks Cayuga and Seneca counties from prosecuting them on felony tax-evasion charges.

The decision sets up the possibility for the Cayugas to reopen their LakeSide Trading gas stations and stores in U nion Springs and town of Seneca Falls, a nation lawyer said.

“The Cayuga Nation is reviewing the option of reopening and hopes to make a determination within a matter of days,” attorney Daniel French, of Syracuse, said.

The appellate court also ruled that the Cayugas could seek to regain possession of the 17,600 cartons of unstamped cigarettes that were seized by both counties in a Nov. 25 raid.

The Cayugas, which closed both of their stores a day after the raids, are also considering asking court permission to get their cigarettes returned, French said.

“Given their perishable nature, the nation may very well make application,” he added.

Rochester lawyer Philip Spellane, who represents both counties, said he was disappointed by the ruling.

He declined further comment other than to say he would review the decision “and figure out what to do with the next step.”

The Cayugas requested the preliminary injunction after state Supreme Court Justice Kenneth Fisher ruled on Dec. 9 that the nation does not have sovereign rights to sell tax-free cigarettes at its stores. Fisher also said in his decision that the counties could prosecute the Cayugas on tax-evasion charges.

The nation immediately appealed Fisher’s ruling and also asked the appellate court to grant the preliminary injunction until it rules on the appeal.

The appeal is now set to be heard in the court’s May 11 term, Spellane said.

Cayuga County District Attorney Jon Budelmann was traveling and declined comment because he said he had yet to see the decision.

“Obviously, it’s disappointing if that’s true,” Budelmann said. Seneca County District Attorney Richard Swinehart was unavailable.

Budelmann and Swinehart ordered the November cigarette raids and said at the time that they planned to present tax-evasion cases to grand juries in their respective counties.

French was happy with the decision.

“The Cayuga Nation is pleased and believes this to be the correct decision and also believes that prosecutions — given the current state of the law — are an inappropriate way to try to resolve issues that can and should be negotiated,” he said.

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NY Senacas seek US troops to ward off cig taxes
Jan 13, 2009
NEW YORK, Jan 13 (Reuters) – The Seneca Nation said on Tuesday it is taking steps to stop New York state from imposing taxes on cigarettes sold by reservation stores, invoking a 1794 treaty that allows the tribe to seek the protection of federal troops.
New York Gov David Paterson on Dec. 15, 2008 signed a law barring wholesalers from selling untaxed cigarettes to the tribe.
A spokeswoman for the Democratic governor said he wanted to “fundamentally” transform the state’s relations with the tribes. “The tax collection issue is one of several issues that the governor would like to address as he moves forward to negotiate with all of the Indian nations in good faith,” she added.
The Senecas have prepared for a blockade, Seneca President Barry Snyder said in a statement.
The Native Americans are advising their members to stockpile basic necessities and setting aside $1 million to hire “emergency response personnel” to provide medical care, ensure children can get to school and protect members from state interference in daily activities.
“Given our history that the state twice tried to interfere with our treaty rights to tax-free commerce, the only responsible approach is to protect our people by preparing for the worst,” Snyder said.
Next week, the tribe will ask President-elect Barack Obama to send “federal troops in the face of the state’s threatening ways and past history of aggression,” he said, in line with provisions of the 1794 Canandaigua Treaty.
Paterson is the third governor to try to stop Native American tribes from selling untaxed cigarettes to people who are not tribal members.
New York loses hundreds of millions of dollars a year by failing to collect the cigarette taxes, and anti-smokers, such as New York City Mayor Michael Bloomberg, want the law enforced.
Convenience stores complain that they cannot compete with tribal stores.
The Senecas are a sovereign nation, the root of their claim to be immune from taxes. They say their shops generate $313 million a year and employ more than 1,000 families.
State Supreme Court Justice Rose Sconiers temporarily blocked the cigarette tax collections and set a hearing for Jan. 27 on whether she should issue a permanent injunction.
The Native Americans are also planning to collect tolls on the New York Thruway in Irving, near Lake Erie, south of Buffalo, the statement said.
New York owes the Senecas more than $20 million for failing to pay a $1 fee imposed on Thruway drivers since May 2007, Snyder said. (Reporting by Joan Gralla in New York, Editing by Dan Grebler)

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Woman charged with tax evasion for buying cigarettes

10/18/2008
By: Katie Morse
BALDWINSVILLE, N.Y. — About twice a month, Gay Breed heads to the Cayuga Indian Nation to buy cheap cartons of cigarettes.

On the way home from her latest trip, she was pulled over by a state trooper for a traffic violation, and told him where she was coming from.

“He said may I see what you bought at the reservation, I said ‘yes sir’, gave them to him, he said I had five, and that was against the law, and he let me drive to the station and he arrested me there” said Breed.

It turns out that purchasing more than two tax-free cartons of cigarettes is illegal, unless you pay the state back for the taxes.

Breed had never heard of the law, and says most of the people she spoke with hadn’t either.

“A lot of my friends are like jeepers, I never knew that. I’ve brought home more than two before,” she said.

State Police charged Breed with misdemeanor tax evasion charge. According to published reports, she could face a $10,000 fine and a year in county jail for violating this little-known law. She says if she had known, she would have done things differently.

“I would go twice a week instead of once a week or something like that. Go more often. But with gas, I’ve been going about every 20 days or so,” she said.

Breed says her mistake should be an eye opener for other people buying cigarettes.

“Absolutely. Because I think a lot of people do it and think that you just can….It doesn’t feel like you’re breaking a law cause you don’t know it.”

Breed says she went back to the store on the Cayuga Indian Nation, and the people there told her they didn’t know about the law.

She will appear in court early next week.

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Judge rules Cayuga Nation can’t sell cigarettes tax-free
12/09/08
Court rules against tax-free smokes 12/9/08 -video
Judge Rules Against Cayuga Nation 12/9/08 video
Judge’s decision (72.0KB) -rtf text document
Auburn, New York (WSYR-TV) – The Cayuga Indian Nation can no longer sell untaxed cigarettes. That’s the ruling from a State Supreme Court judge.
Justice Kenneth Fisher has upheld Cayuga and Seneca counties’ attempts to stop the Indian nation from selling the cigarettes.
Two Cayuga Nation-owned Lake Side Trading convenience stores in Cayuga and Seneca counties were raided by county sheriff’s departments on November 25.  Millions of untaxed cigarettes were seized.
While the district attorneys consider the ruling a victory, they are expecting an uphill legal battle with the Cayugas.
In the 30-page decision, Fisher essentially says that authorities do have the right to enforce the taxation laws at the convenience stores owned by the Nation.
The decision says, according to previous rulings, there is no such thing as “patchwork sovereignty,” and that the land on which the Lake Side convenience stores were located were privately-owned land and not sovereign land, as the Cayugas claimed.
Both DAs plan to take the case to a grand jury. The jury will decide whether charges can be brought against the Cayugas. State law says a store having more than 30,000 untaxed cigarettes is committing a Class D felony, punishable by up to seven years in prison.
The Cayugas have not been selling untaxed cigarettes since the raid; if they do, law enforcement says they will address the violation. 
The Governor’s office offered no comment Tuesday evening; they’re still reviewing the court decision.
Along with barring the counties from enforcing tax law, the Cayugas asked the judge for the seized cigarettes to be returned.
Statement from Oneida County executive on ruling
Statement by County Executive Anthony J. Picente, Jr. regarding decision in the Cayuga-Seneca County matter:
The issue of enforcing taxes against Indians is not new to Oneida County.  For the past three years, Oneida County has been in federal court seeking to collect the real estate taxes owed by the Oneida Indian Nation, but we have been prevented from doing so by federal court injunction. That injunction is presently on appeal.  We are closely following the efforts of Seneca and Cayuga Counties to address the issue of unpaid cigarette taxes on cigarette sales by the Cayuga Indians.
In my role as Oneida County Executive, I have urged and continue to urge the State of New York to collect taxes on Indian sales of cigarettes to non-Indians to the extent permitted by law.  It is time for the State to step in and collect these taxes. It is the State’s responsibility to enforce its tax laws and the citizens of Oneida County expect the State to do the responsible thing.

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Reservation tax bill among Pataki’s 70 vetoes

8/18/2006
By ROBERT J. McCARTHY, News Political Reporter
Gov. Pataki vetoed several bills benefiting public employee u nions.

Gov. George E. Pataki on Thursday vetoed a legislative plan to collect tobacco taxes on Indian reservations, as well as several bills that would have sweetened pensions for a plethora of public employee u nions.

The governor did approve a bill extending the Power for Jobs program that subsidizes electricity costs for businesses that create and retain jobs. But he was clearly in a “veto mood” as he rejected more than 70 pieces of legislation sent to him by the Senate and Assembly.

The most significant move, though by no means surprising, was yet another Pataki rejection of efforts to collect taxes on reservations. Possibly recalling incidents of violence on Indian reservations several years ago in the wake of tax collection efforts, the governor said he had many concerns about the bill, including its failure “to respect tribal sovereignty.”

“It has been my long-standing policy to negotiate on a government-to-government basis with recognized tribal governments to reach mutually beneficial agreements,” Pataki said. “We should not abandon this important principle and jeopardize the state’s good relations with tribal governments simply to raise revenues to support additional spending.”

The bill had been sought by convenience stores that claim they are unable to compete with tax-free sales on Indian reservations like those maintained by the Seneca and Tuscarora tribes in Western New York. The bill also had been sought by health groups. Its sponsor, Assemblyman William Magee, D-Nelson, said Thursday the governor had turned his back on a bill with the potential to collect $400 million in revenue.

“Do we run our Tax Department on “policy’ and just ignore laws?” he asked. “That’s what the governor apparently wants to do.”

He also said he believed that Pataki, who will leave office at the end of the year, was simply leaving the issue for the next governor to resolve.

“He doesn’t seem to want to stand up and address the situation,” he said, adding that the governor’s presidential ambitions now constitute his new agenda.

“I just don’t know how this plays into that agenda,” he said.

Pataki also addressed a number of bills designed to enhance pension benefits of public employees that, in many instances, received overwhelming legislative support. They included efforts to reduce years-of-service requirements to collect pensions, as well as ending individual contributions by some state employees. “At a time of ever-increasing pension costs, I am unwilling to impose new fiscal burdens on the state and its taxpayers,” Pataki said.

While some called June the month that public employee u nions ruled Albany, the governor seemed intent on flexing his veto muscles in August. He nixed several other pro-u nion bills, including one that would have required the Public Employees Relations Board to order a 1 percent increase in the salaries of all bargaining unit members if the employer was found to have not bargained in good faith. Critics said there were no similar considerations for u nions not bargaining in good faith.

“This concern that negotiations would be skewed in favor of labor is compounded by the fact that the bill would fail to impose comparable penalties on an employee organization that does not negotiate in good faith,” Pataki said. “And ultimately, the substantial costs associated with the bill would be borne by the already overburdened taxpayers of this state.”

Some observers say rejection of the pro-labor bills by a governor already campaigning for president in New Hampshire and Iowa polishes Pataki’s conservative credentials. But at home, the vetoes of bills such as one requiring charter schools to pay u nion wages drew praise from the Business Council, the state’s main business organization.

“These bills were just astonishing attempts to make noticeably lavish public employee compensations even better,” said Business Council spokesman Matthew Maguire. “In a state where taxes are already the nation’s highest, in large part because of public employee costs, these clearly are ill-advised from a policy standpoint.”

The Business Council and other observers praised the governor’s approval of continuation of the Power for Jobs program that offers reduced power rates to employers who commit to creating jobs.
e-mail: rmccarthy@buffnews.com

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A Call for Honoring Seneca Nation Treaties
by Rickey L. Armstrong, Sr.

The Seneca Nation of Indians recently launched a statewide public awareness campaign, designed to educate the general public of the potential unconstitutional actions of the State of New York.

The message of the campaign is clear: Break a Treaty, Break the Law.

The adopted 2003-04 New York State budget includes a mandate that the state Department of Taxation and Finance collect state sales tax on the sales of tobacco and gasoline on Native American reservations. Governor George E. Pataki is on the record declaring this action “…an assault on [Native American] sovereignty.” (Governor’s Veto Message, 5/14/03)

The Seneca Nation maintains that the state, through treaties long established between the Nation and the United States, has no right to tax members of the Nation or their trade on Seneca lands.

Article 9 of the Buffalo Creek Compromise Treaty of 1842 between the Seneca Nation and the United States states, “The parties to this compact mutually agree to solicit the influence of the Government of the Unites States to protect such of the lands of the Seneca Indians, within the State of New York, as may from time to time remain in their possession from all taxes ….”

Despite federal law, this is not the first time the state of New York has attempted to use sales tax on Indian land as a way to fill a budget gap. As recently as 1998, the New York State Department of Taxation and Finance repealed similar regulations, noting the “repeal was based on the State’s respect for the Indian Nations’ sovereignty.”

In addition to violating treaties, which the U.S. Constitution states are the supreme law of the land (Article VI, Clause 2), the sales tax law would devastate the Seneca economy. Without the sales tax immunity, many of these businesses will be forced to close, putting hundreds – many of them non-Indians – out of work.

Over the past few decades, dozens of Seneca entrepreneurs have built businesses based on this one advantage that sovereignty affords them, while contributing to the growth of a solid middle class within the Nation. Seneca businesses do not benefit only Senecas. According to a consultant’s report, of the $330 million in commercial revenues generated on Seneca territories in 1996, $227 million left the territories, going to wages and salaries paid to individuals and the purchase of goods and services.

Two-thirds of the workforce employed by Seneca tobacco and gasoline retailers are non-Indian, all of whom are subject to state income and other applicable taxes. In addition, vendors who supply Seneca businesses prosper as these businesses prosper.

The Seneca Nation maintains that the State of New York has no right to tax members of the Nation or their trade on Seneca lands.

Undermining the Seneca Nation’s sovereignty will damage the relationship currently enjoyed by the Nation and New York State, and will undoubtedly impair future collaborative efforts. Most importantly, such action by the state effectively violates treaties established between two sovereign nations – the Seneca Nation of Indians and the United States of America.

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Rickey L. Armstrong, Sr., is president of the Seneca Nation of Indians. He may be reached at Seneca Nation of Indians, Honor Indian Treaties Campaign, P.O. Box 1842, Irving, NY 14081, 1-888-665-5582.
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Tobacco Wholesalers Mull Suit Over NY Cigs

Aug. 7, 2006
By CAROLYN THOMPSON Associated Press Writer

BUFFALO, N.Y. — Tobacco wholesalers frustrated by mixed messages from the state over whether they are still allowed to supply Indian retailers with untaxed, unstamped cigarettes are ready to ask a court to intervene.

At issue is a law that went on the books March 1 that bars wholesalers from selling cigarettes to reservation retailers who sell them tax-free. Attorney General Eliot Spitzer says the law is in effect; the state Department of Taxation and Finance says it is not yet being enforced.

The conflicting positions have meant headaches for businesses like Day Wholesale in Franklin County, which finds itself scrambling to preserve its supply of cigarettes for reservation and non-reservation customers.

According to a lawyer for Day, Philip Morris USA has given wholesalers that supply New York Indian tribes until noon Wednesday to promise to stop selling unstamped cigarettes on reservations or provide written proof that such sales are legal. Otherwise, a July 11 letter said, Philip Morris would stop shipping cigarettes.

The wholesalers say they are in the middle of a political fight between the attorney general’s office and the Pataki administration’s Department of Taxation and Finance over an issue that has sparked violence in the past.

“It’s the state of New York that doesn’t seem to have everybody together as to what they’re supposed to do,” said attorney Margaret Murphy, who represents Day Wholesale.

The letter from Philip Morris came two weeks after an attorney from Spitzer’s office sent letters to tobacco companies, including Philip Morris, telling them that Day and other wholesale clients were continuing to sell tax-free cigarettes to Indian retailers in violation of state law.

“By this letter, we are putting you on notice of this conduct and asking for your cooperation in ending it,” the letter from Assistant Attorney General David Weinstein, said.

Philip Morris USA spokesman Bill Phelps declined to comment Monday except to say that the company supports the legislation governing sales by wholesalers to reservations.

Murphy said a lawsuit to be filed this week will seek to end the uncertainty. In the meantime, she said, her client will stop selling unstamped cigarettes to avoid being shut off by Philip Morris.

“We’re bringing a lawsuit against the state of New York, against the attorney general, asking a court to resolve the issue,” Murphy said. “Is the law in effect? What is the obligation of licensed wholesalers?”

Murphy contended the legislation is not active because certain provisions _ including the issuance of coupons that would allow Indian retailers to sell untaxed cigarettes to tribal members while taxing other customers _ have not been met.

A spokesman for Spitzer said that doesn’t matter.

“The sale in New York of unstamped cigarettes is a clear violation of the law, regardless of who is doing it,” Marc Violette said, “regardless of whether it’s a private individual or an Indian nation or anybody else.”

A spokesman for the Department of Taxation and Finance did not return a call for comment Monday.

The law aimed at wholesalers is among the latest attempts by the state to collect millions of dollars of tax revenues on cigarettes sold by Indian retailers to non-Indian customers.

Tribes such as the Seneca Indian Nation, which operates numerous smoke shops in western New York, say centuries-old treaties shield them from having to collect taxes on their sovereign territories. That allows them to sell at lower prices than their non-Indian competitors. Seneca retailers sold $347.5 million worth of tobacco products in 2003.

A 1997 attempt by the state to collect tax on reservation sales resulted in violent clashes between state police and tribal members in western New York.

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Senecas blast new law cutting tobacco supply
6/22/2006
Seneca Nation of Indians President Barry E. Snyder Sr. called the passage of a state law to cut off the supply of tax-free cigarettes to Indian businesses a “back-door effort” to get Seneca tobacco stores to collect state taxes.
“The State Legislature has once again taken action to undermine our sovereign right to consume and trade tobacco products in our territory,” Snyder said. “The nation, as well as individual Senecas, cannot be denied the ability to purchase tobacco products, because we are not subject to state taxes.
“As always,” Snyder added, “we will contemplate any and all options that may be necessary to protect our economy and defend our sovereignty.”

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Reservation Cigarettes to be Taxed

by Virginia Butler
Jun 22, 2006
The state senate approved a bill to collect sales tax on tobacco products sold at Native American owned businesses.

The bill requires taxes be collected from manufacturers on the cigarettes they sell to all distributors, including all Native American distributors. The bill sponsor, State Senator Mike Nozzolio says the change will generate more than $400 million annually in state revenue.

The bill was sponsored in the assembly by William Magee, and it was approved there last week.

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New York Indian Tribes Rally to Support Native Businesses

MASTIC, N.Y., June 15, 2006 /PRNewswire/ — The Native American Business
Alliance of Long Island today caravanned from the Unkechaug Powwow Grounds
(Mastic, N.Y.) to the Shinnecock territory (Southampton, N.Y.) to support
its new grassroots effort to protect Indian Nations’ right to sell tax-free
tobacco products.
“The faces you see here today are the faces of those who depend on
Native American Businesses,” Unkechaug tribal chief Harry Wallace said.
“Without our treaty-mandated right to sell tax-free tobacco, these
businesses — these people — will suffer. That is why we are here today —
to defend our rights and to defend our economic independence.”
Members of Tuscarora, Seneca, Onondaga, Oneida, Cayuga, Mohawk, Pequot,
Narragansett and other Nations, along with friends, neighbors and business
colleagues of the Tribes, rallied against the politicians and wealthy
special interest groups that have passed legislation and filed lawsuits
that threaten to terminate centuries-old treaties protecting the right of
New York Tribes to sell tax-free tobacco and other goods on their own
territories. With over 5,000 supporters thus far, the Alliance is demanding
that new legislation be enacted to rescind this unjust act. The Alliance is
also urging New York citizens to call upon the convenience stores and big
chain supermarkets, asking them to drop their lawsuits against these small
Indian smoke shops.
Following the rally, supporters toured a Shinnecock-owned small
business, “Raindrop’s Quick Stop” on Montauk Highway.
“The politicians in Albany need to visit native businesses like these
so they can see that executing this legislation will cripple the economy of
New York Tribes,” said Rebecca Genia, of the Shinnecock Nation. “Taking
away the rights laid out in these long-standing treaties would take away
many people’s livelihood.”
Income from Indian smoke shops helps Tribes pay their own way, using
some of the profits to fix schools, churches, playgrounds and housing on
reservations. They also employ hundreds of tribal members with full
healthcare and retirement benefits and generate economic activity for
local, non-Indian businesses that supply their stores.
New Yorkers can join the Alliance by going to
http://www.supportnativebusiness.com, where they can sign a petition, write
directly to state officials, and get additional information.
The Native American Business Alliance of Long Island represents the
Nations and the Indian-owned stores of the Unkechaug and Shinnecock
Nations. We have formed this coalition because without help from our
friends, neighbors and business colleagues, these stores will be shut down
— ending a vital source of economic activity. Visit
SupportNativeBusiness.com for more information.

SOURCE Native American Business Alliance of Long Island
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