NY top court: Tax on Indian-reservation cigarettes is legal

ALBANY — New York’s top court on Thursday upheld a state law imposing taxes on cigarettes purchased on Indian reservations by non-Indians.

The owner of a Seneca Nation smoke shop on the Cattaraugus Reservation south of Buffalo had claimed the state law, adopted in 2010, violated the Buffalo Creek Treaty of 1842 because it effectively was a direct tax on Seneca Nation members.

Not so, the state Court of Appeals ruled in a 7-0 decision.

“There is no ambiguity here,” Judge Michael Garcia wrote for the court. Noting that the tax is borne by non-Indian customers, he added: “Neither the Treaty nor the statute supports an argument that . . . taxation of non-Indian customer is prohibited.”

The lawsuit had the potential to impact cigarette prices not only for the Seneca Nation but any Native American tribe that sells cigarettes. State taxes add $4.35 in excise taxes alone to the cost of a single pack.

A spokeswoman for Attorney General Barbara Underwood said the state was pleased with the decision but didn’t comment further.

Paul Cambria, the attorney for Eric White, the smoke shop owner who challenged the state statute, didn’t immediately return a call to comment.