Mon Sep 29,
By The Associated Press
Now the city is suing eight smoke shops that have been selling tax-free cigarettes on a Long Island Indian reserve. The lawsuit accuses the small cluster of shops on the Poospatuck Indian Reservation of breaking state and federal law by selling massive quantities of cigarettes to bootleggers.
It says the bootlegged smokes are then smuggled off the reserve and resold throughout the
Mayor Michael Bloomberg's administration says the practice has gone on for years and costs the city and state hundreds of millions of dollars annually 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.