U.S. SC will hear online tobacco sales case

John O'Brien May 5, 2009, 3:00pm

WASHINGTON (Legal Newsline) - The U.S. Supreme Court will decide if tobacco distributors can be sued by the City of New York for not paying the City's taxes when they ship mail orders.

Hemi Group, of New Mexico, and Kai Gachupin appealed a decision by the 2nd U.S. Circuit Court of Appeals that said it could be sued under federal racketeering statutes. The City says online sellers of cigarettes have intentionally defrauded it of tax revenues.

It says the sellers were required to report purchases by City residents.

A Dow Jones Newswires report says the City of New York has the highest excise taxes per pack in the country at $4.25.

The case will be heard in the fall.

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.

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