NEW YORK, March 13 (Reuters) - New York City and state
officials on Tuesday sued "roll-your-own" cigarette shops in
Brooklyn and Staten Island for allegedly dodging cigarette
taxes, the latest in a wave of lawsuits that have shut down
similar stores across the city.
The lawsuit, filed in the Southern District of New York by
Corporation Counsel Michael Cardozo and Attorney General Eric
Schneiderman, names BB's Corner in Brooklyn and Nitecap
Entertainment in Staten Island as defendants. Both stores
provide customers with access to loose tobacco, cigarette papers
and machines that roll cigarettes on site, according to the
The lawsuit says that 200-cigarette cartons were sold at
each store for roughly $40. Both stores advertised prices "up to
70 percent off retail" for a carton that could be rolled in as
little as 8 minutes, the complaint states.
The cartons sold at the two stores did not include
approximately $58.50 in state and city excise tax required on
each carton sold in New York City, according to the complaint.
Excise tax is a revenue-raising measure imposed on certain goods
like cigarettes and alcohol.
The stores claimed they were not obliged to pay taxes
because they did not sell cigarettes, but merely gave customers
the tools to assemble their own, according to a joint statement
from Schneiderman and Cardozo.
The lawsuit also accused the stores of selling cigarettes
that did not comport with New York fire-safety regulations.
New York City has already used lawsuits to force six
roll-your-own cigarette shops in Manhattan, Brooklyn and Staten
Island to close, city spokeswoman Connie Pankratz said. The
lawsuit filed Tuesday is the first brought jointly by city and
state authorities, Pankratz said.
"Rather than playing by the rules, these stores and others
like them are cheating the state and city of New York out of
millions of dollars in legitimate tax revenue and endangering
public health and safety while they're doing it," Schneiderman
said in a statement.
The suit seeks an injunction to stop the stores from selling
and distributing the non-taxed cigarettes, as well as lost
revenue from the allegedly illegal activities.
The suit does not claim a specific dollar amount.
Calls to BB's Corner and Nitecap were not immediately
returned Tuesday afternoon.
The case is State of New York and City of New York v. BB's
Corner Inc. et al., in the U.S. District Court for the Southern
District of New York, No. 12-1828.
(Corrects prior version, which reported that cartons did not
include $70 in state and city taxes. The correct figure is
(Reporting by Jessica Dye)
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