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    NYC Sues Online Cigarette Sellers

    Retailers charges with making illegal shipments and evading taxes.

    NEW YORK -- New York City sued seven operators of online cigarette retailers, charging them with making illegal shipments and evading taxes.

    The suit seeks to bar the defendants from shipping cigarettes into the state and to recoup millions of dollars in tax losses. The retailers are charged with violating a state law enacted in March that bans Internet and mail-order sales of cigarettes. The suit also alleges violations of the federal "Jenkins Act," which requires retailers shipping cigarettes across state lines to report the shipments for tax purposes, according to Crain's New York.

    City officials say that with more than 400 such Internet sites in existence, it is difficult to pin down the total tax losses, but they are expected to be substantial.

    According to the report, one online retailer was able to deliver enough cigarettes in eight months through the United Parcel Service (UPS) to create a $1.5 million tax loss for the state.

    In January, the City filed a lawsuit against a separate set of Internet sellers, alleging violations of the "Jenkins Act". The suit is still pending.

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