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Wednesday, May 11, 2011

Cigarette taxes on Indian reservations. The Second Circuit has held that the District Court improperly enjoined the state from enforcing a cigarette tax on sales in Indian reservations. Because the tax was paid by the consumer, not by the Indian retailer, the law did not violate tribal immunity or the tribal immunity for state taxation. And while the retailers would bear an economic burden from the prepayment of the tax, that is only because they chose to participate in the taxable cigarette market.

The decision in Oneida Nation of New York v. Cuomo can be found here.

UPDATE: After losing before the Second Circuit, the tribes went to state court and obtained a temporary restraining order enjoining New York frommtaxing reservation cigarette sales to non-Indian customers. A hearing on the tribes' motion for an injunction will be held on June 1, 2011.

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