The state has seized a Seneca tobacco retailer's truck containing thousands of cartons of cigarettes, a move some see as a test by the government as Albany looks to start collecting taxes on Indian cigarette sales in the months ahead.

The truck was seized Monday by at least one state tax and finance agent as it made its way between the tribe's Cattaraugus and Allegany reservations.

Brad Maione, a tax department spokesman, said the state confiscated "thousands of cartons of cigarettes that did not have a New York State tax stamp as required by law."

He said the cigarettes were "allegedly possessed illegally by an individual not on reservation property." He declined to answer any questions about the case.

Senecas said the truck was owned by Aaron J. Pierce, a Seneca businessman who has been among those challenging in court the legality of a new federal law that targets mail-order cigarette trade.

Pierce declined to comment and referred calls to his lawyer. Lisa Coppola, a lawyer with the firm representing Pierce, released a statement from Pierce's company, AJ's Wholesale, calling the warrantless seizure "illegal."

The seizure came just one day before Seneca Nation businesses asked a federal judge in Buffalo to delay the federal government's ban on mailing cigarettes until their appeal can be heard by a higher court.

The government, during a hearing Tuesday before U.S. District Judge Richard J. Arcara, countered by asking him to put on ice his temporary prohibition against the collection of taxes on cigarettes mailed by Seneca businesses.

The dueling requests are part of the fallout from Arcara's order last month upholding the crux of a new federal law that Seneca business owners say will cripple their mail-order tobacco operations.

"Right now, they're all shutting down," William Parry, the owner of Wolf's Run in Irving, said after the two-hour court session. "There are a lot of people out of work."

Arcara is expected to rule later this week, maybe as early as today, on the two motions that he heard Tuesday.

Outside the courtroom, Seneca businesses found themselves dealing with a state government eager to crack down on untaxed cigarettes.

AJ's Wholesale cited a bid last year in Central New York by local officials to seize Indian cigarettes, a move later rejected by the courts.

AJ's said the state tax agents Monday "abandoned" the truck driver "and boxes of melting candy" along a stretch of Route 353A outside the Town of Dayton. It said the seizure was unconstitutional.

"This outrageous seizure is clear retaliation for my company's litigation in federal court," Pierce said.

Seneca Nation President Barry E. Snyder Sr. called the stopping and seizing of the truck "unprecedented" for goods traveling between the Seneca reservations. He said the cigarettes were legally flowing between Seneca-licensed businesses.

"The nation does not take lightly this overt act of state aggression against the nation and its people," he said. He said the nation will weigh its options "to protect and preserve" its sovereign rights.

The seizure has caused a stir on Seneca land, with officials concerned that cigarettes with a tribal tax stamp will be confiscated by state officials.

"Stopping vehicles going from one territory to another is something new. We're all one entity: the Seneca Nation," said Richard Nephew, chairman of the Seneca Tribal Council.

Tensions are already high on the reservations. Between the new federal PACT Act targeting mail-order tobacco shipments and a looming state effort to halt tax-free cigarette sales by Indian tribes in New York, Seneca business owners see their thriving tobacco trade in jeopardy. For years state officials have expressed concern about violence erupting, as was seen in the late 1990s the last time the state tried to collect the cigarette tax.

While the state's effort to collect taxes on Indian cigarette sales to non-Indian consumers is not due to start until Sept. 1 at the earliest, Maione said it is already illegal to transport cigarettes without a New York State tax stamp on "New York property."

Fueling the volatile environment is the federal court case before Arcara.

In his previous order, the judge upheld the federal government's ban on the mailing of tobacco products but allowed for other forms of interstate sales of tax-free cigarettes.

Under other federal and state laws, buyers still would be required to pay taxes on those cigarettes.

At the core of the court case is the Prevent All Cigarette Trafficking Act, or PACT Act, which was passed by Congress and signed into law in March by President Obama.

The new law is viewed by both critics and supporters as sweeping legislation with billions of dollars in tax revenue and thousands of jobs at stake, many of them in Western New York.

During Tuesday's court session, Arcara heard from government lawyers who argued that a stay of his injunction against the taxing portion of the law is warranted because of the public health risks associated with untaxed cigarettes.

"In a nutshell, what's gotten lost is that preventing the sale of cigarettes that are untaxed dramatically decreases the number of kids who start smoking," said Matthew Myers, president of the Campaign for Tobacco Free Kids in Washington, D.C.

Arcara, in rejecting the taxing aspect of the new law, said, "The court is aware of no other federal statute requiring out-of-state retailers to be subject to taxing schemes for state and local governments into which they ship goods."

Arcara, in that same decision, rejected a request by Seneca businesses for a preliminary injunction that would have prevented the government from enforcing the overall ban on mailing tobacco products.

During the hearing, a lawyer for the Seneca Free Trade Association argued that the harm caused by the ban on cigarette mailing is sufficient to warrant an injunction until the case can decided by an appeals court.

tprecious@buffnews.com and pfairbanks@buffnews.comnull