Supreme Court Justice Kenneth Fisher ruled in December that the tribe could not sell untaxed cigarettes, but his decision was overturned by a state appellate court, which said the Cayugas could resume selling tax-free cigarettes.
"The landscape has changed a little bit, but it's the same holding that it was evidence seized [image-nocss] as part of a criminal action and does not have to be returned at this point," said Phillip Spellane, the attorney for Cayuga and Seneca counties.
Meanwhile, the two counties have challenged the appellate court decision. If accepted, their appeal would be heard by the Court of Appeals, the state's highest court. "The judge believed since there was a pending appeal...it would not be appropriate for him to return the cigarettes," said attorney Lee Alcott, who represented the tribe.
Fisher ruled without prejudice, which means the Cayugas could come before him again to ask for return of the cigarettes once all the appeals are exhausted, Alcott said. Fisher also denied the tribe's request that the counties put up a bond to cover the value of the cigarettes, which was estimated at more than $500,000. Alcott also argued the cigarettes are a perishable commodity with a limited shelf-life.
County authorities seized the cigarettes and business computers Nov. 25, 2008, from the tribe's LakeSide Trading stores in Union Springs and Seneca Falls. County officials said the stores were violating state law by selling cigarettes without charging the required tax and owed $485,000 in state excise taxes.
The Cayugas claim they are exempt from collecting the taxes because their businesses are protected by their sovereign nation status.
On Wednesday, a federal judge in Brooklyn issued a ruling barring a group of smoke shops on Long Island's Poospatuck reservation from selling tax-free cigarettes to the general public, saying their location on tribal lands didn't exempt them from state and federal tax law.
U.S. District Judge Carol Bagley Amon ruled that only members of the Unkechaug tribe, which controls the reservation, had a right to buy cigarettes there without paying taxes, not non-Indian customers. The judge stayed the ruling for 30 days to give the shops time to appeal, which they said they would.
Spellane and Alcott differed over whether the federal court ruling would have any bearing on the Cayuga's case in state courts.
Indian smoke shops have enjoyed a huge business in cigarettes since the mid-1990s, in part thanks to a string of governors who have refused to enforce state laws that were supposed to set up a system for taxing sales to the general public, said AP.
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