Law may turn up heat on some Oklahoma tribes

By Michael McNutt
The Oklahoman, Oklahoma City
(MCT)

A new law that takes effect next year will help crack down on tribal retailers selling cigarettes with the wrong state tax stamps and also should serve as an incentive to get tribes to sign tobacco compacts with Oklahoma, a state Tax Commission official said Monday.

Provisions of Senate Bill 608, signed last week by Gov. Brad Henry, change state law to comply with current tribal tobacco compacts, Oklahoma Tax Commission Administrator Tony Mastin said.

''It will help us with our enforcement activities," Mastin said.

''The statute currently just says unstamped cigarettes. Some packs of cigarettes don't have the right stamps on them ... so it clarifies that."

The measure, which takes effect Jan. 1, also makes it clear the state has the right to require tribes without a compact to buy tax stamps, he said.

The Tax Commission issues different stamps that determine how much tax a retailer owes. Nontribal retailers pay $1.03 per pack; tribes with state compacts pay a lower rate.

Tribes without a tobacco compact with the state under present law are charged a 75 percent rate, or 77 cents per pack, on the cigarettes sold in their tribal stores.

Effective Jan. 1, tribes without a compact will pay the full $1.03-per-pack rate on packs over an allotted number of packs they can sell without having to buy a state tax stamp, Mastin said.

The Tax Commission will develop a consumption rate for each tribe, he said. The rate will be based on the percentage of smokers in each tribe.

''We will allow them that many zero-tax stamps and then require them on the balance to pay 100 percent," he said. "It is supposed to represent those sales that are to their tribal members for their own consumption, which we cannot tax, and then everything else gets 100 percent."

Mastin presented data Monday to the state Cigarette and Tobacco Tax Advisory Committee that six tribes with active, licensed tobacco stores lack state tobacco compacts.