New York City and New York state sued United Parcel Service Inc. on Wednesday, seeking over $180 million in damages and penalties against the shipping company for allegedly delivering nearly 700,000 cartons of untaxed cigarettes across the state. The lawsuit, filed in U.S. District Court in Manhattan, accuses UPS of cheating the state and city of $29.7 million and $4.7 million, respectively, in tax revenue, according to a statement from New York Attorney General Eric Schneiderman. The deliveries mostly originated from smoke shops on Indian reservations in New York state and were shipped to unlicensed wholesalers and retailers as well as residences in New York and nationwide, according to the lawsuit. The deliveries, which violated both federal and state laws, were made despite a 2005 agreement between UPS and the state in which the company agreed to stop cigarette shipments to individual consumers and unlicensed dealers, Schneiderman said.
A similar suit filed last year against FedEx remains pending. Cigarettes sold in New York City are taxed an extra $5.85 per pack.