taxation – Page 39 – Turtle Talk

The City of New York has brought an Amended Complaint against the above-captioned defendants, [2] cigarette wholesalers who are state-licensed cigarette stamping agents. The principal contention of the City is that the wholesalers violated the Contraband Cigarette Trafficking Act (“CCTA”), 18 U.S.C. § 2341 et seq., by shipping in excess of 10,000 unstamped cigarettes to Native American reservation retailers who re-sold the cigarettes to the public. According to the City, the former version New York Tax Law § 471 applied a tax to cigarettes sold to reservation retailers for re-sale to the public, and the defendant agents violated that provision by distributing large quantities of cigarettes to reservation retailers without purchasing and affixing the requisite state tax stamps. The City currently seeks civil penalties or disgorgement of profits pursuant to the CCTA, and also brings state law claims for public nuisance and violations of the Cigarette Marketing Standards Act (“CMSA”), New York Tax Law § 484. The parties have engaged in multiple rounds of motion practice, as well as some discovery, and now cross-move for summary judgment.

The defendants’ principal contentions are that the City lacks standing to pursue this action against them, that they were not legally required to [3] affix state tax stamps to the cigarettes at issue, and that they lack the requisite scienter for liability. The City counters that the defendants’ arguments can all be rejected as a matter of law, and that there are no outstanding issues of material fact regarding its entitlement to monetary relief under the CCTA.

For the reasons stated below, the Court grants summary judgment to Day Wholesale, Inc. on the grounds that the City has failed to put forth sufficient evidence that it suffered an injury-in-fact from Day’s sales of unstamped cigarettes. The Court concludes that the City is entitled to summary judgment on the issue of the liability of defendants Gutlove & Shirvint, Inc. and Mauro Pennisi, Inc. for CCTA violations, and that some amount of civil penalties is appropriate. The Court will hold a further hearing for the purpose of assessing the penalty amount. The Court denies the cross-motions as to the City’s CMSA claim, and deems the public nuisance claim withdrawn.

Materials in United States v. David Cypress (Fmr. Seminole Vice Chair)

August 9, 2012Matthew L.M. Fletcher

Here is the news coverage.

Here are the materials:

Cypress Information

Cypress Plea Agreement

Cypress Sentencing Memorandum

Improper State Taxation of Reservation-Domiciled Military Servicemembers

July 27, 2012Peter Scott Vicaire1 Comment

A week before the country celebrated Independence Day, the Iowa Tribe of Oklahoma became the first Native nation to adopt an official resolution in support of restoring improperly withheld pay to eligible Native American veterans and service members.

Continue reading →

Michigan Bar Journal Article on Michigan Taxes and Indian Tribes

July 22, 2012July 21, 2012Matthew L.M. Fletcher

Here.

Opinion in United States v. Morrison

July 16, 2012Kate Fort

We posted about the lower court decision here.

Of the many arguments that the parties have raised, only two warrant extended 11 discussion. The first is the government’s contention that the district court erred in vacating Morrison’s conspiracy conviction on the ground of vagueness. The second is Morrison’s claim that the CCTA was inapplicable to him given New York’s “forbearance policy,” under which the State refrained from collecting taxes on cigarette sales transacted on Native American reservations. According to Morrison, this forbearance policy barred his conviction under the CCTA because that statute provides that, in order for a federal prosecution to lie, the state in which the allegedly contraband cigarettes are found must “require” tax stamps to be placed on cigarettes. We reverse the district court’s order vacating Morrison’s RICO conspiracy conviction and reject all of Morrison’s challenges to his convictions.

Opinion

Appellant/Government’s Brief
Defendant/Appellee Brief
Government’s Response & Reply Brief
Appellee Reply Brief

Federal Court Denies Miccosukee Petition to Quash IRS Summons for 2010 Tax Year

July 13, 2012Matthew L.M. Fletcher

Here are the materials in Miccosukee Tribe v. United States II (S.D. Fla.):

DCT Order Denying Miccosukee Motion to Quash

US Motion to Dismiss Petition to Quash

Miccosukee Response

US Reply

Transcript of Deposition of IRS Agent

We posted materials on the discovery request to depose the IRS agent here.

Materials on Miccosukee I (tax years 2006-2009, now on appeal to the CA11) are here. The key difference between I and II (other than tax years) is the Tribe’s claim that the government sought the financial documents for an improper purpose.