The Court of Appeal judges said Maori and non-Maori prisoners were "treated the same way".
"Neither can vote. The policy does not have the effect, directly or indirectly, of treating the two groups differently," they ruled.
"If [the ban] is discriminatory under the Bill of Rights because the disproportionate representation of Maori in prisons means that they will be disproportionately disadvantaged, the same will apply to all prison policies that have a negative effect on prisoners' lives.
"Maori prisoners are not deprived of something that other prisoners can enjoy. Further, other groups in addition to Maori are overrepresented in prisons," they said - such as men and young people.
The proportion of Maori in prison was less than 1 per cent of the Maori population, the judges said - the same as with the non-Maori population, and therefore "so small that there is no material disadvantage".
Overall, the judges concluded that the ban did not directly or indirectly breach any of the provisions in the Bill of Rights, and dismissed the appeals.
Taylor, who has been denied parole 18 times, became infamous in 1998 after he escaped from the maximum security prison at Paremoremo north of Auckland with three others, including double murderer Graeme Burton.
The group made their way to Coromandel, where they hunkered down in luxury holiday homes and the bush to evade authorities.
He is serving a 17-year jail sentence for serious violence and drug-related crimes.
In recent years he has been in the headlines for his role as a "jailhouse lawyer", taking a number of legal actions against the Department of Corrections, including challenging the legality of the prison smoking ban and inmates' voting rights.