NY Court Upholds Seizure Of Untaxed Cigarettes

ALBANY (AP) -

A midlevel court on Thursday upheld the seizure of a truckload of untaxed cigarettes in northern New York, a shipment that was ordered by an Indian tribe in Nebraska.

The ruling overturned an appellate decision that a tribe failed to show there was “a genuine out-of-state transaction” exempt from New York’s tax of $4.35 per pack. Police eventually released most of the 26,000 cartons of cigarettes in July 2012.

Under New York law, cigarettes can be sold to tribe members tax-free, but should be taxed when sold to non-Indians. That has resulted in a booming business for some tribes, who say that as sovereign nations they shouldn’t pay state tax at all.