The latest in a tangled series of state and federal court decisions has halted New York state's plan to collect taxes on cigarettes sold by Native American retailers to non-Indian customers.

A state appellate court judge in western New York on Wednesday restored an order stopping the collections, Gov. David Paterson's office said. An earlier order had been lifted Monday by a state judge, a decision appealed by the Seneca and Cayuga nations.

Those tribes won a separate federal court order Tuesday temporarily barring collections against them. But the state had said it would start imposing the $4.35 per pack levy on other reservation retailers starting Wednesday.

"We are disappointed today that the appellate division has stayed the implementation of our statute and regulations with respect to licensed stamping agents," Paterson spokeswoman Jessica Bassett said. "Despite this ruling, we believe the state's legal arguments are sound and we believe that ultimately the state will prevail in this matter."

The Indians' challenges are in multiple courts because they're attacking the taxation on several levels. The Senecas' federal court suit, which the Cayugas joined, seeks to invalidate the state tax law by arguing New York lacks jurisiction to regulate Indian nations within their territories. The tribes' state court challenge, meanwhile, opposes the expedited way New York tax officials chose to adopt the regulations to implement the law, not the law itself.

Attempts to collect the tax in the 1990s resulted in sometimes-violent protests and fires on Seneca territories, which at one point shut down the New York State Thruway where it bisects the Senecas' Cattaraugus reservation. State officials have been reluctant to push the issue since.

But with New York facing a fiscal crisis, the governor and state lawmakers vowed in June to go after what they view as a potential $200 million revenue source by requiring cigarette wholesalers, effective Sept. 1, to prepay the sales taxes before supplying reservation stores.

Lawyers for Indian tribes are in federal court today to make a last-ditch effort to stop legislation taxing reservation cigarette sales to non-Indian customers.

This comes after a state judge yesterday refused to block New York State from enforcing a $4.35 per pack tax starting tomorrow.

Seneca Indian Nation officials had argued that the state circumvented procedures by adopting the regulations on an emergency basis.

The tax is expected to generate an estimated $200 million a year in revenues for the state.

Tribes argue the plan infringes on their sovereignty and could damage their economies.

"Tax Lady" Roni Deutch says California Attorney General Jerry Brown is engaging in election year politics by filing a lawsuit accusing her law firm of false advertising and misleading consumers.

Deutch said in a statement Tuesday that she will fight the $34 million lawsuit filed a day earlier in Sacramento County Superior Court by Brown, the Democrats' nominee for governor.

She says her firm has saved thousands of people tens of millions of dollars through negotiations with the Internal Revenue Service over nearly 20 years.

The suit accuses her of vastly overstating the number of delinquent taxpayers she has helped. The suit also alleges she ran up clients' fees through false billings.

Brown spokeswoman Christine Gasparac says the lawsuit is backed by evidence gathered during a monthslong investigation.

Many Americans could be hit with a big tax increase in the next two or three years despite President Barack Obama's repeated promises to shield the middle class from higher rates.

Democrats are hedging about making Obama's pledge stick for more than a year or two, setting up a major battle on a super-sensitive subject just before the November elections.

With the most sweeping tax cuts in a generation due to expire in January, the Democrats are divided over whether the government can afford to make any of them permanent — especially with voters increasingly upset over the fast-rising federal budget deficit.

Party lines are clear on part of the issue: Most Republicans want to permanently extend all the tax cuts enacted during George W. Bush's presidency, nearly $3 trillion worth over the next decade. Democratic leaders want to let the cuts for the wealthiest Americans expire.

The Democrats want to extend them for everyone else, but perhaps only temporarily, out of concern for the rising red ink. That's where Democratic lawmakers are struggling to find agreement.

Former Detroit Mayor Kwame Kilpatrick has returned to his hometown for his first court appearance since being indicted last month on tax and fraud charges.

Kilpatrick was arraigned Tuesday afternoon and a not guilty plea was entered at the request of his lawyer. Wearing orange jail clothes, Kilpatrick indicated that he can't can afford a lawyer and one will be appointed for him.

The judge could keep James Thomas on the job at the public's expense.

Kilpatrick is charged with tapping his charity the Civic Fund for cash and personal luxuries while he was mayor and not reporting it on his tax returns.

He has been serving time at a state prison for violating probation in a different criminal case. He will remain in federal custody while he awaits trial.

Businesses have added 4.5 million workers under a new program that provides tax breaks for hiring unemployed workers, the Treasury Department said Monday.

It is unclear, however, how many of those workers would have been added without the tax break.

President Barack Obama signed a law in March that exempts businesses hiring people who have been unemployed for at least 60 days from paying the 6.2 percent Social Security payroll tax through December. Employers get an additional $1,000 credit if new workers stay on the job a full year.

Treasury released a report Monday estimating that from February to May, businesses added 4.5 million workers who qualify for the tax breaks. Those businesses are projected to save $8.5 billion in taxes.

The Department of Justice has opened a criminal investigation into whether some HSBC Holdings Plc clients may have failed to disclose offshore accounts, lawyers familiar with the probe said on Tuesday.

The London-based bank has become the latest focus of a widening federal probe into U.S. citizens believed to have stored billions of dollars of assets in offshore accounts to avoid scrutiny by domestic tax authorities.

HSBC clients have received a June 21 letter from Kevin Downing, a senior litigator at the Justice Department who oversaw the UBS probe, that says they are subjects of a criminal investigation. Reuters obtained a copy of the letter.

A Justice Department representative did not immediately return an email request for comment.

Last year, Switzerland's UBS AG admitted to criminal wrongdoing for helping U.S. clients evade taxes. It agreed to pay a $780 million penalty and hand over details on more than 250 client accounts, and later agreed to disclose names of 4,450 wealthy U.S. clients to tax investigators.