BILL NUMBER: S2591

SPONSOR: HELMING
 
TITLE OF BILL:

An act to amend the tax law, the Indian law and the real property tax
law, in relation to the definition of "qualified reservation"

 
PURPOSE:

To clarify that Indian nations are only exempt from the payment of sales
taxes on cigarettes purchased for their own use on reservations where
they exercise sovereignty over such lands and that only such lands are
exempt from the payment of real property taxes and specify that the
Cayuga Indian Nation does not meet these qualifications.

 
SUMMARY OF PROVISIONS:

This bill amends subdivision (16) of Section 470 of the Tax Law to make
clear that the definition of a "qualified reservation" does not include
The Cayuga Indian Nation The bill also amends Section 6 of the Indian
Law and Section 454 of the Real Property Tax Law by defining "Indian
              

reservation" to be consistent with the definition of "qualified reserva-
tion" in Section 470 of the Tax Law.

 
JUSTIFICATION:

In 2010, the New York Court of Appeals issued its decision in CAYUGA
INDIAN NATION OF NEW YORK V. CAYUGA COUNTY wherein it reaffirmed the
Appellate Division 4th Department's 2009 ruling that the Cayuga Nation
did not have to collect the sales tax on cigarettes sold to non-Indian
consumers at two stores located on their aboriginal land. Specifically,
the Court ruled that despite the fact that the Cayuga Nation has no
present reservation in the state, the properties involved met the statu-
tory test under the Tax Law of being a qualified reservation (wherein
the state is without power to impose a tax on sales to Indians) because
their reservation, established by a treaty in 1789 and further acknowl-
edged by the treaty of Canandaigua in 1794, was never disestablished by
Congress.

Thus, the Court ruled that the two Cayuga Nation stores were located on
reservation land even though the Nation exercised no sovereign control
over them. Ultimately, only Congress or the United States Supreme Court
can settle the issue concerning the ramifications of a Native American
nation acquiring real property in an unrecognized but also un-disestabl-
ished reservation, Until that occurs, this bill would require that real
property owned by the Nation to be taxed support for the bill's
provisions can also be found in the 2005 decision of the Supreme Court
of the United States in CITY OF SHERRILL V. ONEIDA INDIAN NATION OF NEW
YORK which held that the Oneida do not exercise sovereignty in whole or
in part over parcels they recently purchased on the open market and that
such parcels are subject to real property taxes. The holding in SHERRILL
applies not only to the specific parcels within the City of Sherrill at
issue but also to lands recently purchased by the Oneida within their
historic reservation of 250,000 to 300,000 acres. The principle of SHER-
RILL applies equally to lands recently purchased by other New York
Tribes including the Cayuga Indian Nation because in that the historic
reservation has not been "disestablished."

 
LEGISLATIVE HISTORY:

2019-2020: S.2081 referred to Budget and Revenue/A. 4144 held in Ways
and Means

2017-2018: S.2576 referred to Investigations and Government
Operations/A.5337 held in Ways and Means.

2015-2016: S.3286 referred to Investigations and Government
Operations/A.5439 held in Ways and Means.

2013-2014: S.4679A passed Senate/A.5393-A held in Ways and Means.

2011-2012: S.3866-C referred to Investigations and Government
Operations/A.5151-B held in Ways and Means.

 
FISCAL IMPLICATIONS:

Could result in a minimal increase in sales tax collection from any
affected stores.

 
EFFECTIVE DATE:
Immediately.