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APPELLATE COURT RULES STATE IS ENTITLED TO TAX INDIAN GAS, CIGARETTE SALES

It will be business as usual on Indian reservations across the state despite a decision Friday by the Appellate Division of State Supreme Court reversing a lower court order in May that lifted the state's blockade of cigarettes and gasoline to the reservations.

Joseph F. Crangle, attorney for Indian businessmen, said he would immediately ask the state Court of Appeals for permission to appeal the ruling.

He said it could be late fall before the Court of Appeals answers the request, but he was "confident the Court of Appeals would be aware it had never passed judgment on treaties between the Seneca Nation and New York State."

In May, during the height of an Indian protest against Gov. Pataki's decision to force collection of state sales and excises taxes on reservation sales to non-Indians, State Supreme Court Justice Rose H. Sconiers of Buffalo ruled that the state's actions were illegal and must be lifted.

The judge found that the state Department of Taxation and Finance had selectively enforced tax laws in temporarily seizing gasoline being delivered to the Seneca Nation's Cattaraugus reservation during a six-week blockade.

In the meantime, Pataki in June backed off his tax demands and pledged to work for an amendment to state tax law that would allow Indians to sell tax-free cigarettes and gasoline to non-Indian customers on their lands.

At the same time, Pataki pledged to press ahead in appealing Sconiers' ruling merely to clarify the law, while assuring Seneca Nation leader Michael Schindler that the state is committed to passing a law to halt future attempts at taxation on Indian reservations.

On Friday, the Appellate Division in Rochester sided with the state and overturned her decision. "We conclude that the court erred," it wrote.

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