"Some tribal retailers flooded parts of northeastern Oklahoma with cigarettes taxed at just 6 cents per pack. That tax rate was allowed by compact in border areas of the state, but the cigarettes were distributed well outside those areas. As a result, tribal tax revenue came in many millions of dollars below projections month after month. In 2005 alone, for example, revenue came in $85 million below the estimate.
The governor and his top aide in these matters, Treasurer Scott Meacham, have reworked compacts with some tribes in an effort to stop the bleeding. One of the most significant involved a deal with the Cherokee Nation, reached late last year, that placed a new, lower tax on all cigarettes sold by the tribe while eliminating the 6-cent tax provision. Reworked compacts are having some effect: The Tax Commission said sales tribal cigarette tax collections were up by about $18 million last year, to $46.3 million.
The Legislature has done what it can, too. A law that takes effect Jan. 1 makes it clear that the state has the right to require tribes without a compact to buy tax stamps. Those tribes (about a half-dozen) now must pay 77 cents per pack on cigarettes sold in their stores. Under the new law, they will be allotted a number of packs they can sell without having to buy a state tax stamp, then pay the full tax rate of $1.03 per pack on all packs over that amount.
Tax Commission Administrator Tony Mastin said the new law "will help us with our enforcement activities.” Time will tell to what degree."
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Editorial: Tobacco tax collections off mark? Imagine that
(The Oklahoman 10/20)
Osage Nation in new deal for tobacco tax