Cayuga Indian Nation of New York v. Gould

The Cayuga Indian Nation sued Cayuga County law enforcement officials on the basis that the statute governing the collection of cigarette sales taxes imposed on qualified Indian reservations provided the exclusive means by which to tax cigarette sales to non-Indians and non-member Indians on a reservation.  Whether the tribe's two convenience stores were located within a qualified reservation as defined by the tax law was at issue in this matter. The County Supreme Court denied the tribe's motion for summary judgment.  The tribe appealed. The Supreme Court (Appellate Division) reversed.  The Court of Appeals held that the convenience stores were located on a “qualified reservation” and the tribe's retailers could not be prosecuted for possession and sale of untaxed cigarettes.

Cayuga Indian Nation of New York v. Gould, 14 N.Y.3d 614, 930 N.E.2d 233, Court of Appeals of New York (2010).

  • United States
  • May 11, 2010
  • Court of Appeals of New York
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Parties

Plaintiff Cayuga Indian Nation of New York

Defendant David S. Gould

Legislation Cited

Federal Indian Gaming Regulatory Act

Tax Law § 470 (New York)

Related Documents

Type of Litigation

Tobacco Control Topics

Substantive Issues

Type of Tobacco Product

None

"In sum, although Tax Law § 471 certainly “imposes” a cigarette sales tax, we conclude that the Cayuga Nation is entitled to a declaration that the absence of an appropriate legislative or regulatory scheme governing the calculation and collection of cigarette sales taxes that distinguishes between federally exempt retail sales to Indians occurring on a “qualified reservation” and non-exempt sales to other consumers precludes reliance on Tax Law § 471 as the sole basis to sanction Nation retailers for alleged noncompliance with the New York Tax Law. Contrary to the dissent's suggestion otherwise, we are not relying on Tax Law § 471-e as the basis for this conclusion. We have assumed, for purposes of this appeal, that section 471-e is not in effect-if that statute was enforceable, there would be a statutory method for calculating and collecting the taxes generated by the Nation's retail sales at its convenience stores. Nor do we claim that section 471-e has created a tax exemption. The restrictions that limit the State's efforts to collect cigarette taxes from Indian nations or their members in this context are derived from federal law and this prompted the Legislature to address the need for a specialized tax collection scheme by adopting Tax Law § 471-e. Since section 471-e was never operative, and no other comparable statutory or regulatory scheme has filled that gap, the Nation is entitled to declaratory relief."
"Thus, the issue in this case is not whether sales taxes are due when non-Indian consumers purchase cigarettes from Indian retailers-they are. The issue is whether Indian retailers can be criminally prosecuted for failing to collect the sales taxes from consumers and forward them to the Department. In the absence of a methodology developed by the State that respects the federally protected right to sell untaxed cigarettes to members of the Nation while at the same time providing for the calculation and collection of the tax relating to retail sales to non-Indian consumers, we answer this question in the negative."