The Tonawanda Seneca Nation in N.Y., Monday, Aug. 23, 2010. Tensions are rising as the state nears the Sept. 1 start date to collect taxes on cigarettes sold by Indian tribes.
Two New York tribes are making a last-ditch effort to block the state's plans to tax reservation sales of cigarettes to non-Indian customers.
Lawyers for the Cayuga and Seneca nations are due in federal court in Buffalo on Tuesday to seek a temporary restraining order that would stop the state from imposing a $4.35 per pack tax on cigarettes sold by reservation retailers starting on Wednesday.
The tribes say the policy change violates sovereign rights and will damage their economies.
The cash-strapped state sees a potential $200 million source of annual revenue.
State tax officials say cigarette makers sold 24 million cartons of cigarettes to New York Indian tribes last year.