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Bloomberg targets smoke shops on Poospatuck reservation 

After banning smoking in bars and restaurants, Mayor Michael Bloomberg is now targeting eight Mastic smoke shops, filing a lawsuit yesterday against the retailers on the Poospatuck Indian reservation, claiming they are unlawfully selling untaxed cigarettes.

The shops can sell the cigarettes tax-free to reservation residents but not to others, New York City officials said. The illegal untaxed cigarettes sold at the shops means at least $525 million lost in state tax revenue each year, while the city loses $195 million from city residents making purchases there, officials said. Bootleggers reselling the tax-free cigarettes from reservations statewide costs taxpayers more than $1 billion annually, city officials said.

A city investigation shows that the eight smoke shops sold nearly 24 million tax-free cigarettes since 2004.

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