NEW YORK, NY September 29, 2008 —The city is suing members of Native American tribes in New York, for illegally salling tax-free cigarettes.

REPORTER: The head of the city's Corporation Counsel, Michael Cardozo, says Indian-owned businesses based on Long Island have been selling millions of packs a year to non-tribe customers, who are not allowed to buy cigarettes without paying taxes.

CARDOZO: People are driving up to these reservations in trucks. Knowing that instead of the roughly 70 dollars a carton they're going to pay 35 dollars a carton.

REPORTER: The city has filed a complaint in federal court against eight businesses, and intends to file an injunction later this week, seeking to halt sales at those stores. No response yet from tribal officials