State University of New York Institute of Technology
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NY State joins NYC in suing FedEx over untaxed cigarettes

On march 31st New York joined New York City in suing FedEx for 239 million dollars for supposedly shipping over 400,000 untaxed cartons of cigarettes to NY residents.  FedEx ships customer’s orders from Shinnecock Smoke Shop into NY without checking the packages contents for untaxed products.  New York City claims FedEx has become a “public nuisance” because they allegedly ship untaxed cigarettes to NY.     New York City claims they deserve $239 million in damages and penalties for these 400,000 cartons of cigarettes. The state claims that they get $15, $27.50 or $43.50 Per case of Cigarettes.  If you do the math out 400,000 cartons multiplied by the top amount of tax allowed to be charged that comes out to 17,400,000.  While that is a lot of money I think it is far from the 239 Million the state is suing for. I also think FedEx should not be required to pay this fee because FedEx has a duty to its customers and not open the packages it ships (unless there is an extreme case).  FedEx is also the only one being sued NY is not going after the multiple smoke shops accused of selling untaxed cigarettes.

Link:

http://www.reuters.com/article/2014/03/31/fedex-newyork-idUSL4N0MS3MM20140331

 


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