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    NY Tobacco Wholesalers Sue City, State

    Distributors say city tax is unfairly harming vendors and boosting illegal sales of cigarettes

    NEW YORK -- Furious over a city hike that has jacked retail prices as high as $8 a pack for premium cigarettes in New York City, 14 plaintiffs led by the N.Y. Tobacco and Candy Wholesalers have sued the city and state in hopes of undoing the $1.42-a-pack increase imposed earlier this year by Mayor Michael Bloomberg.

    Filed yesterday in state court, the lawsuit said taxes have led many to buy cigarettes on the Internet or black market, thus harming licensed vendors. The plaintiffs, according to the Associated Press, denounced the tax as a "social initiative" dressed up as a revenue-raising device and said lost sales will sap $175 million from government coffers this fiscal year.

    Although the higher tax is expected to bring in $215 million, wholesalers project a 52.9 percent decline in city sales of legally stamped cigarettes, resulting in a $390 million cost to the state.

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