Wednesday, August 26, 2009

No More Cheap Cigs

via Newsday:

In a decision that could put a significant crimp in untaxed cigarette sales from the Poospatuck tribe's reservation in Mastic, a federal judge has granted New York City's request for an injunction against sales to non-Indians.

U.S. District Judge Carol Amon, following a four-day hearing in May, found that sales from reservation smoke shops, fueled a massive bootlegging trade of cheap smokes in New York City that deprived the city of tax revenue and reduced the effectiveness of anti-smoking programs.

Although untaxed sales to tribal members for their personal use are legal, Amon said the privately run smoke shops named in the suit had abused the privilege - with bulk sales of massive quantities, and efforts to help buyers evade police.

"Defendants' principal business model is to provide customers with the opportunity to purchase cigarettes at significantly reduced prices, without paying taxes," Amon wrote in the decision, issued Tuesday.

New York City, in its lawsuit filed in 2008, alleged that reservation smoke shops had sold 24 million cartons since 2004 - more than 19,000 a day for the 300 residents of the 55-acre reservation - depriving the city of $195 million and the state of $525 million in taxes.

Earlier in the case, Amon rejected an argument that the smoke shops and their owners, which are licensed by the Unkechaug tribe, could not be sued because they are part of a sovereign nation.

The injunction covers five smoke shops and nine individuals. Other defendants settled earlier in the case. Amon stayed the injunction for 30 days to give the defendants a chance to appeal.

The city law department said it would be issuing a statement on the decision later Wednesday. The lawyer who led the defense for the smoke shops could not be reached immediately for comment.


I don't know how I feel about this. I understand the need to crack down on people selling bootleg smokes in the city. That's a lot of revenue lost. But at the same time that's a problem between the state and the bootleggers. The reservation should be able to sell to whomever they wish. And I'm not even a smoker!


Anonymous said...

Honestly, everything comes down to money. The state is just pissed because they are losing money in taxes but don't they tax us out of the ass anyway?

Johnny said...

I agree, let 'em smoke 'em if they got 'em. This little fact of cigs from the Res is just another piece that makes Mastic so unique.

todd said...

soooo what are we exactly smoking when we buy Marlboro from the reservation? i cant say i havent..

Anonymous said...

Had Bloomberg not raised the taxes abhorrently to the point that individuals went outside of N.Y.C. , the city would still be recieving their share of tax revenue, and this suit would not have taken place.

Also, drug sales from this reservation have significantly decreased since many who live on these reservations now have the right to open shops and sell cigarettes. Crack and Heroin are not FDA regulated - nicotine is - has anyone considerded the potential of drug sales to skyrocket once their shops are shut down, and the impact to our community?

Will Bloomberg begin lawsuits against other states that sell untaxed cigarettes if he is allowed to shut down the reservation?

While we're at it, why does Long Island not sue the city for sending their drunks to our county, since the city does not have any type of sober housing? That mayor has inflicted enough damage to our community - when will somebody stop him?