An appellate court judge in New York blocked the state from imposing a tobacco tax on reservations but Gov. David Paterson (D) said he would appeal.

The state is forcing wholesalers who sell tobacco to tribal retailers to pay the tax up front. That essentially forces tribes to collect the tax on the sale of tobacco to non-Indians.

On Tuesday, a federal judge put the law on hold for the Seneca Nation and the Cayuga Nation. The appellate court judge said the rest of the tribes can continue to sell tax-free tobacco until a September 9 hearing.

At $4.35 a pack, New York's tobacco tax is the highest in the nation.

Get the Story:
Court Blocks New York Tax on Tribal Cigarette Sales (The New York Times 9/2)
State relents after ruling on cigarette tax (The Buffalo News 9/2)
NY back to square one after appeals court justice temporary bars taxing Indian cigarette sales (The Syracuse Post-Standard 9/2)
Judge bars N.Y. from collecting taxes on Native American retailers' cigarettes (AP 9/1)

Relevant Documents:
ATF Letter on Tribal Consultation (May 19, 2010)

Prevent All Cigarette Trafficking Act:
H.R.1676 | S.1147

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