By KELSEY SWANEKAMP
Buffalo Law Journal

An appellate court ruling that the Cayuga Nation can sell tax-free cigarettes in convenience stores on its land is being hailed by the Seneca Nation of Indians.

The 4th Department Appellate Division of New York State Supreme Court issued a ruling July 10 that reversed a 2008 Supreme Court decision.

The appellate decision addressed two central issues: whether the Cayugas could sell tax-free cigarettes to non-Indians, and whether the convenience stores selling the cigarettes were on land that was qualified for tax-free sales.

In its written decision, the court pointed out that "historically," New York has not tried to collect cigarette taxes on Indian reservations - and it concluded that the state cannot impose taxes in this case. Because the convenience stores sat on land that was not originally part of the Cayuga Nation, the court also considered whether the stores could legally sell the tax-free cigarettes to non-Cayuga customers. Again, the court found in the Cayuga's favor.

In response to the court's ruling, the Seneca Nation issued a statement praising the court's decision.

In the statement, Seneca Nation President Barry Snyder said that the ruling supports their belief that New York cannot impose taxes on reservation-sold cigarettes. "Any embargo on the sale of non-taxed cigarettes would be catastrophic to the economy and employment in the Seneca Nation's Territories," he said.

Rob Porter, an attorney for the Seneca Nation, said that the nation has an interest in the decision because of this "prominent" tobacco economy. He said the Nation's Western New York tobacco sales total about $100 million a year.

Attempts to reach the Cayuga Nation for comment were not immediately successful.