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More than 400 websites sell cigarettes over the Internet. (Winston-Salem Journal/ File 2008) |
High court takes cigarette-tax case
Bloomberg News
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May 5, 2009
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The US Supreme Court has agreed to scrutinize lawsuits by New York City that accuse discount cigarette retailers of using Internet sales to evade taxes potentially totaling hundreds of millions of dollars a year.
The nation's highest court yesterday said it will review a lower court's ruling that the city could press ahead with federal racketeering claims in lawsuits filed in 2003 and 2004.
Two of the defendants appealed to the high court.
More than 400 websites sell cigarettes over the Internet, with many falsely advertising their sales as "tax free," according to the complaint the city filed in 2003. The city's racketeering claim accuses the retailers of not complying with a US law requiring them to turn over information about their customers to state officials for tax-collection purposes.
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