Sep 29, 2008 10:44 am US/Eastern
NYC Sues Reservation Smoke Shops Over Bootlegging
NEW YORK (AP) ―
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Smoker exhales smoke, Aug. 13, 2006.
AP
New York City is suing eight smoke shops that have been selling tax-free cigarettes on an Indian reservation on Long Island.
The lawsuit accuses the small cluster of shops on the Poospatuck (POOS'-puh-tuhk) Indian Reservation of breaking state and federal law by selling massive quantities of cigarettes to bootleggers, who then smuggle the cartons off the reservation and resell them throughout the
metropolitan area.
The practice has existed for years, but Mayor Michael Bloomberg's administration says it costs the city and state hundreds of millions of dollars a year in lost tax revenue.
Tribal authorities have long acknowledged that smuggling is a problem, but they defend the right of the shops to sell cigarettes without collecting state tobacco taxes. The suit was filed in Brooklyn federal court.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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