Two Lake Side Trading stores owned by the Cayuga Nation have temporarily suspended operations pending a review of Tuesday's state supreme court decision that ruled the businesses could be investigated for felony tax evasion.

Dan French, an attorney for the Cayuga Nation, said the stores stopped all operations on Wednesday after he talked with the nation's leadership. The nation does not charge taxes on any purchases made at the store.

"The Cayuga Nation has always abided by the law, and the law seems to be in flux right now," French said. "Until there is more clarity we will temporarily suspend business."

In a written decision, state Supreme Court Judge Kenneth Fisher rejected the nation's lawsuit against the district attorneys' and sheriffs' offices in Seneca and Cayuga counties.

The nation claimed law enforcement illegally raided and searched their businesses in Seneca Falls and Union Springs on Nov. 25 because they were located on a reservation owned by a sovereign nation.

The tribe, along with other Indian nations in New York, have claimed they are exempt from collecting sales and excise taxes on their property because their businesses are protected by their sovereign nation status.

Fisher said the tribe, while recognized as a sovereign nation, did not have a recognized reservation according to New York state's tax laws. He also said that an injunction on a part of the tax law only prevented the use of a coupon system to exempt American Indians from paying tax, and did not excuse the tribe from collecting taxes on transactions made by non-Indians.

Fisher cited the decisions of several U.S. and state Supreme Court rulings involving the Oneida and Cayuga nations as the basis for his decision.

French said the nation will appeal Fisher's ruling.

Between the two stores, French said more than 30 employees were out of work, and that the nation will be losing a key source of income for its social programs.

"I am sure this will result in a hardship for the nation's programs," French said. "The revenue wholly supported their health care, roads, homes and employment."

Cayuga County Sheriff David Gould said the stores were allowed to sell taxed cigarettes and that there was no investigation into the sale of untaxed gas at either location.

"If they closed, it was not because we shut them down or told them they had to," Gould said. "We have maintained that they can sell anything at there stores as long as they are taxed."

But French said the nation had no intention of collecting excise or sales tax.

"The Cayuga Nation is a sovereign nation that owns these stores within their reservation," French said. "No nation, including the Cayuga Nation has ever collected or administered sales tax, and no nation has ever been required to do so."