A UPS airplane. Photo: Kuba Bożanowski
Business | Law

Judge tells UPS to pay $247M for shipping Indian tobacco products

A federal judge has ordered United Parcel Service to pay $247 million for transporting Indian tobacco in New York.

In March, Judge Katherine Forrest held UPS liable for shipping tobacco products to and from reservations in the state. She said the world's largest package delivery company must pay $165,817,479 to the state and $81,158,135 to New York City for violating state and federal laws, The Associated Press reported.

The laws at issue require Indian-owned tobacco shippers to pay taxes on the sale of goods to non-Indians. The smoke shops, however, were not a part of the lawsuit filed by the state and New York City.

The judge said Indian Smokes, Arrowhawk/Seneca Cigars/Hillview Cigars/Two Pine Enterprises and Native Wholesale Supply and Seneca Promotions were among the shippers who used UPS to send products to non-Indians. The companies are based on the based on the Seneca Nation, the Tonawanda Reservation and the St. Regis Mohawk Reservation, according to the lengthy March ruling in the case, a copy of which was posted by Turtle Talk.

New York imposes the highest tobacco tax in the nation and has been trying to thwart the Indian tobacco industry for decades. Officials in the state have pressured shipping companies and the banking and financial sectors into restricting their dealings with smoke shops on reservations.

Congress stepped in with the Prevent All Cigarette Trafficking Act, which requires Indian smoke shops to address state and local taxation issues. It also bars the U.S. Postal Service from transporting certain types of cigarette products. The bill was sponsored by members of New York's Congressional delegation.

Read More on the Story:
Judge: UPS must pay $247M to NYC and state in cigarette case (AP 5/25)
Judge Orders UPS to Pay $247 Million for Illegally Shipping Cigarettes (The New York Times 5/25)

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Judge holds UPS liable for transporting Indian tobacco products (March 29, 2017)