Scott Rapp / The Post-Standard Tuesday December 09, 2008, 1:18 PM
State Supreme Court Judge Kenneth R. Fisher has rejected a request by the Cayuga Indian nation for an injunction barring Cayuga and Seneca counties from enforcing state tax laws regulating the sales of cigarettes.
The judge's ruling was released today.
Cayuga County legislator Raymond Lockwood said he has not seen the decision but said it "was very favorable to us." He was notified by the county's law firm, Harris Beach, of Rochester.
Sheriff's deputies in the two counties seized the cigarettes and records in coordinated simultaneous raids carried out two days before Thanksgiving.
The two stores have not sold cigarettes since the raids, but sales of cigars and other tobacco products have continued. Those tobacco products are regulated by a different section of state tax law and were not part of the county action.
The Cayugas had asked the judge to bar the counties from trying to enforce state law requiring the Indian nation to pay excise and sales tax due on cigarettes at the Cayuga's two LakeSide Trading stores, one in Union Springs and the other in Seneca Falls. The Cayugas also wanted the more than 17,000 cartons of cigarettes returned, along with business records.
Eleven lawyers made their cases in court last week.
It was clear then the case before Fisher would come down to this:
Do the Cayugas have sovereign nation rights to sell tax-free cigarettes at their LakeSide Trading gas station and convenience stores in Union Springs and Seneca Falls?
The lawyers representing the counties collectively argued that the nation lost sovereign rights in 2005 when the U.S. Supreme Court rejected a parallel land-claim case involving the Oneida Indian Nation. Later, a federal appeals court dismissed the Cayugas' land claim on similar grounds.
Lawyers for the Cayugas collectively disagreed and said the top court ruling did not disestablish their reservation, which they said still comprises 64,000 acres of ancestral homeland around the north end of Cayuga Lake.
They said the land on which the nation's stores sit is considered under state law to be a qualified reservation, which the lawyers said permits the Cayugas to sell tax-free cigarettes and other goods.
Lawyers for the Cayugas also argued that the counties are trying to enforce a state tax law that was enjoined from being enforced two years ago.
The cigarette tax issue was rekindled last month when sheriff's deputies from both counties raided the two stores and seized all of the nation's 17,600 cartons of cigarettes for not paying about $485,000 in state excise taxes on them. The excise tax does not include state sales tax.
District attorneys in both counties are considering filing criminal charges.