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Judge holds UPS liable for transporting Indian tobacco products

Filed Under: Business | Law | National
More on: new york, taxation, tobacco

A UPS truck. Photo: Carl Spencer

The world's largest package delivery company is on the hook for millions of dollars after being found liable for shipping Indian tobacco products in New York.

United Parcel Service turned a "blind eye" to shipments to and from reservations in the state, Judge Katherine Forrest ruled on Friday. The firm and its executives knew the packages contained tobacco products destined for non-Indian consumers, she said.

"UPS understood that all of the relevant shippers were located on or closely proximate to an Indian reservation known previously to have one or more smoke shops and/or cigarette shippers," Forrest wrote in the 200-page decision, a copy of which was posted by Turtle Talk. "The UPS drivers and sales account personnel who met with customers saw signage on or near shippers’ businesses indicating that cigarettes or tobacco were among their wares."

According to the ruling, the relevant shippers include Indian Smokes, Arrowhawk/Seneca Cigars/Hillview Cigars/Two Pine Enterprises and Native Wholesale Supply and Seneca Promotions. They are based on the Seneca Nation, the Tonawanda Reservation and the St. Regis Mohawk Reservation, the judge wrote.

Officials claim the shippers, although they aren't a part of the lawsuit, must pay taxes on the sale of tobacco to non-Indians. According to Reuters, the state and New York City believe they have been deprived of $872 million in taxes over the years.

“We’re very pleased that the court agreed with us on all claims, finding that UPS has repeatedly violated numerous state and federal contraband cigarette trafficking laws – as well as its own agreement with the state – by shipping hundreds of thousands of cartons of cigarettes to consumers in New York,” Attorney General Eric T. Schneiderman said in a statement on Friday.

. New York imposes the highest tobacco tax in the nation.

Read More on the Story:
Judge Finds UPS Liable to New York Over Cigarette Shipments (Reuters 3/24)
Judge rules UPS to pay for shipping boxes of untaxed cigarettes in New York (The New York Daily News 3/24)
UPS Loses N.Y. Trial Over Reservations' Untaxed Cigarettes (Bloomberg News 3/24)
Judge Rules UPS Ignored Signs Its Trucks Were Used To Ship Untaxed Cigarettes (CBS News 3/24)

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