Although Seneca Indians are still prohibited from using the U.S. mail to ship tobacco products to customers, they will not have to pay out-of-state taxes of places to where those cigarettes are shipped.
That is the result of a Tuesday ruling by the Second Circuit Court of Appeals.
"This is a positive decision from the appellate court ... and how it affects Seneca Nation trade," said Robert Odawi Porter, Seneca Nation of Indians president.
"No out-of-state tax collection is required on remote sales," he said, adding the second circuit did not modify an earlier injunction made by U.S. District Court Judge Richard Arcara, stating the Seneca entrepreneurs need not be bound by federal Prevent All Cigarette Trafficking act provisions requiring Seneca retailers to comply with the tax, licensing and other laws of states to which they deliver cigarettes.
Senecas argued Congress overstepped in the PACT Act by requiring Seneca retailers to comply with laws of states where their product was being bought, even though their businesses are not located in those states. On Tuesday, the Second Circuit agreed with the earlier ruling made by Arcara that the provision of the act requiring complying with other states' laws and taxes could have devastating economic harm on Seneca retailers.
The court did affirm that Congress can prohibit the use of the U.S. Postal Service to mail cigarettes. Seneca retailers may, however, ship product to buyers in other states without complying with other states' requirements, all of which may be different from one another.
According to an Associated Press article, the Second Circuit Court of Appeals rejected government arguments that Arcara's July 2010 order granting a preliminary injunction was an abuse of his judicial discretion.
Arcara stayed enforcement of certain provisions of the PACT Act that was signed into law by President Barack Obama, concluding a group of about 140 Seneca businesses was likely to win its legal challenge against them. Arcara refused to block other key provisions of the act, including one barring retailers from shipping cigarettes through the mail, which forced numerous Seneca businesses to close.
The Seneca Nation has not decided yet whether to appeal the remainder of the ruling, prohibiting its retailers to use the U.S. mail to ship product. The U.S. Attorney's office did not comment about an appeal.