The Poospatuck reservation covers just 55 acres at the edge of a suburban neighborhood in the town of Mastic, about 60 miles from New York City.

If the court decisions are applied to all reservation smoke shops statewide, they could doom a $6 billion-a-year business in Indian tobacco that now accounts for a third of New York’s cigarette sales. The Poospatuck case is being watched closely. But the cigarette trade on New York’s reservations dwarfs the business in other states, with 304 million packs sold in 2007 alone.

Other states have also struggled with the sale of untaxed cigarettes at reservation smoke shops, and federal prosecutors have filed smuggling charges in recent years against a few dealers in Idaho and Washington. 25 in a case in which federal prosecutors set out to blame him for a murder but wound up convicting him of illegally trafficking in cigarettes. He could get up to 30 years in prison when he is sentenced Sept. This month, Poospatuck stores may have to begin collecting taxes for the first time because of a federal judge’s ruling that untaxed sales to non-Indians are illegal.

Dismayed by the lost tax revenue, New York City has waged a legal battle that could put shops like Morrison’s out of business.