NEW YORK (AP) - New York City is waging a legal battle that could put tax-free cigarette shops out of business.
This month, Long Island's Poospatuck Indian Reservation smoke stores may have to begin collecting taxes for the first time. A federal judge has ruled that untaxed sales to non-Indians are illegal.
The Poospatuck case is being watched closely. If the court decisions are applied to all reservation smoke shops across the state, they could doom a $6 billion-a-year business in Indian tobacco. That business now accounts for a third of New York's cigarette sales.
The cigarette trade on New York's reservations dwarfs the business in other states, with 304 million packs sold in 2007 alone.
