Amd §470, Tax L; amd §6, Indian L; amd §454, RPT L
Provides that lands held by the Cayuga Indian Nation of New York shall not be considered a qualified reservation for purposes of certain tax law and real property tax law provisions.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A3355
SPONSOR: Gallahan 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 SPECIFIC PROVISIONS:
Section 1: Subdivision 16 of section 470 of the tax law, as added by
section 1 of part K of chapter 61 of the laws of 2005, is amended.
Section 2: Section 6 of the Indian law is amended. Section 3: Section
454 of the real property tax law is amended. Section 4: Identifies the
effective date.
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 1.789 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 sover-
eign 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-disestablished reservation. Until that occurs, this bill would
require that real property owned by the Nation to be t axed 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 sovereign-
ty 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 SHERRILL 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."
PRIOR LEGISLATIVE HISTORY:
2021-22:A.4988
2019-20:A.4144
2017-18:A.5337
2015-16:A.5439
2013-14:A.5393-A
2011-12:A.5151-B
FISCAL IMPLICATIONS:
Could result in a minimal increase in sales tax collection from any
affected stores.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
3355
2023-2024 Regular Sessions
IN ASSEMBLY
February 2, 2023
___________
Introduced by M. of A. GALLAHAN -- read once and referred to the Commit-
tee on Ways and Means
AN ACT to amend the tax law, the Indian law and the real property tax
law, in relation to the definition of "qualified reservation"
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 16 of section 470 of the tax law, as added by
2 section 1 of part K of chapter 61 of the laws of 2005, is amended to
3 read as follows:
4 16. "Qualified reservation." (a) Lands held by an Indian nation or
5 tribe that is located within the reservation of that nation or tribe in
6 the state;
7 (b) Lands within the state over which an Indian nation or tribe exer-
8 cises governmental power and that are either (i) held by the Indian
9 nation or tribe subject to restrictions by the United States against
10 alienation, or (ii) held in trust by the United States for the benefit
11 of such Indian nation or tribe;
12 (c) Lands held by the Shinnecock Tribe or the Poospatuck (Unkechauge)
13 Nation within their respective reservations; or
14 (d) Any land that falls within paragraph (a) or (b) of this subdivi-
15 sion, and which may be sold and replaced with other land in accordance
16 with an Indian nation's or tribe's land claims settlement agreement with
17 the state of New York, shall nevertheless be deemed to be subject to
18 restriction by the United States against alienation[.]; or
19 (e) Notwithstanding the provisions of paragraphs (a), (b), (c), and
20 (d) of this subdivision, lands held by the Cayuga Indian Nation of New
21 York shall not be considered a qualified reservation as that term is
22 defined in this subdivision.
23 § 2. Section 6 of the Indian law is amended to read as follows:
24 § 6. Exemption of reservation lands from taxation. 1. No taxes shall
25 be assessed, for any purpose whatever, upon any Indian reservation in
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04907-01-3
A. 3355 2
1 this state, so long as the land of such reservation shall remain the
2 property of the nation, tribe or band occupying the same.
3 2. Notwithstanding the provisions of subdivision one of this section,
4 lands held by the Cayuga Indian Nation of New York shall not qualify for
5 the exemption set forth in such subdivision.
6 § 3. Section 454 of the real property tax law is amended to read as
7 follows:
8 § 454. Indians. 1. The real property in any Indian reservation owned
9 by the Indian nation, tribe or band occupying them shall be exempt from
10 taxation and exempt from special ad valorem levies and special assess-
11 ments to the extent provided in section four hundred ninety of this
12 chapter.
13 2. Notwithstanding the provisions of subdivision one of this section,
14 lands held by the Cayuga Indian Nation of New York shall not qualify for
15 the exemption set forth in such subdivision.
16 § 4. This act shall take effect immediately.
