Judge rules for NY in cigarette tax dispute

BUFFALO, N.Y. - A federal judge has sided with New York in the latest ruling in a dispute over the state's plans to tax most Indian reservation smoke-shop sales, but collection of the tax is on hold for now.

U.S. District Judge Richard Arcara in Buffalo has denied a request to block the state from collecting a sales tax on cigarettes sold to non-Indians. But he froze his decision so the two tribes who sought the order can appeal.

That means New York still can't start collecting the $4.35-per-pack sales tax until a higher court hears the case.

Arcara's ruling was issued Tuesday in a case brought by the Unkechaug and St. Regis Mohawk tribes. It mirrors an earlier decision in a challenge by the Seneca and Cayuga nations.

It's unknown how long the appeals process will take.

Attorney General Andrew Cuomo's office has asked a federal judge in Utica to transfer a lawsuit filed there by the Oneida Nation to Buffalo, to be consolidated with the Seneca case and another lawsuit brought by the Unkechaug Nation, which sells cigarettes on the Poospatuck Indian Reservation on Long Island.

This story is supplemented with a report from Newsday archives.