Editorial: State serious about tribal tobacco taxes

Tuesday, February 27, 2007  

"There's good news on a couple of fronts that means bad news for untaxed cigarette sales in the state.

* The Yakama Nation wants to renegotiate an agreement for collection of cigarette taxes on reservation smokeshop sales. In July 2004, the nation agreed to charge -- and keep -- a tax similar to the state's levy on cigarettes. The tribal tax is subsequently collected from both Indian and non-Indian customers.

* A Seattle man is one of several in the state who is finding out the state is very serious about collecting unpaid taxes on out-of-state cigarette sales over the Internet. The Seattle Times reported that he ignored several billings from the state and now owes nearly $8,000 in unpaid cigarette taxes and penalties. The state has started garnishing 25 percent of his wages.

Now back to the Yakamas: The state had served notice it would begin proceedings to terminate the cigarette tax agreement with the Yakama Nation. The department found that cigarettes continued to be sold on the reservation without valid tribal tax stamps, in violation of the agreement.

According to a DOR spokesman, the retailers are supposed to buy cigarettes from licensed wholesalers who buy the stamps from the tribe and affix them to the packs before they are sold to retailers. The problem has been that several types of tribal stamps are floating around, and all but one is invalid.

Tribal officials say collection of the tax has been working a hardship on tribal retailers and have asked the state for mediation, which has been granted. One of the concerns cited is that reservation cigarette prices that include a tax can actually make cigarettes higher in smokeshops than some off-reservation discount outlets, costing the smokeshops business."

Get the Story:
Editorial: State serious about collecting cigarette taxes (The Yakima Herald-Republic 2/27)

Related Stories:
State to terminate Yakama cigarette compact (02/09)
Judge hears case against tribal tobacco retailers (11/15)
Court to hear Yakama tobacco smuggling case (10/17)
Yakama Nation considers withdrawing tax deals (09/19)
Washington Republicans question gas tax deals (08/08)
Two Washington tribes reach tax deal with state (7/31)
Two Washington tribes collect own gasoline tax (05/30)
Editorial: Don't get too worked up about gas tax (5/16)
State seeks gasoline tax agreement with tribes (5/15)
Washington tribes meet with state over taxes (5/1)
Two Washington tribes reach deal on state gas tax (01/27)
Washington to use gas tax decision against tribes (12/7)
Supreme Court upholds state tax on reservation fuel (12/7)