OKLAHOMA CITY – Oklahoma officials are considering raising
taxes on tribal tobacco sales to a level that could eliminate their competitive
advantage over nontribal tobacco retailers, NewsOK.com reports.
Governor Mary Fallin said the push is to make tobacco taxes
more consistent in the state. Over the past few month’s, her staff has been
negotiating the compacts with many of the state’s American Indian tribes.
Currently, five tribes have agreed to new deals: the Kaw, Cheyenne and Arapaho,
Otoe Missouria, Apache and Fort Sill Apache tribes.
While tribes are sovereign entities and are not subject to
state taxes, they remit a payment in lieu of taxes to the state via
wholesalers.
Oklahoma’s tribal retailers operate with five different tax
rates. Smoke shops within 20 miles of the border with Kansas or Missouri charge
either 6 or 26 cents per pack; those outside the 20 miles charge 43 cents, 51.5
cents or $1.03 per pack; and nontribal retailers charge $1.03 per pack.
Oklahoma is looking to fix all tribal taxes at $1.03, making
them even with those that nontribal retailers pay. In return, the state would
rebate to the tribes half of the taxes charged at retail outlets on their
lands.
“Basically, at the end of five years, in Oklahoma almost
every tribe will be at that rate,” said the state’s General Counsel Steve
Mullins. “They will buy a (tobacco) stamp for $1.03, but we will refund one
half that amount of money. All cigarettes sold in Oklahoma will be sold at
$1.03.”
“What the governor said was we’re not going to just
rubber-stamp and renew the tobacco compacts up for expiration,” said Alex
Weintz, Fallin’s spokesman. “But absolutely we want to sit down with every
tribe interested in doing so to negotiate new compacts.”