Collecting taxes from cigarettes on Indian reservations sold to non-tribal members, a long-sought source of revenue for New York, will have to a wait.
A federal judge in Buffalo on Tuesday issued a temporary block on collecting the tax, which is expected to generate about $150 million for the cash-strapped state.
The ruling is a victory for the Seneca and Cayuga Indian nations, the two tribes that have come out in vehement opposition to the tax-collection plan approved earlier this summer.
Seneca Nation President Barry Snyder said in a statement that the “ruling sets the stage for an orderly and thoughtful legal review of what we believe is an illegal, ill-conceived attempt by New York State to use the Seneca Nation, and other Indian Nations located within its boundaries, as piggy banks to balance the State Budget.”
Lawyers for the state and the tribes are due back before Judge Richard Arcara on Sept. 2 for a hearing.
In addition to a lawsuit filed earlier this month that challenges the legality of the state’s plan, the Seneca Nation of Indians on Monday night voted to withhold casino revenue payments to the state in protest of the collection plan.
The state has received more than $700 million in the last 10 years from the casino revenue, according to the Seneca tribe.
Morgan Hook, a spokesman for Paterson, said the amount owed to state for the first half of the year is about $30 million.