Store chain posts petitions urging opposition to proposed tax

TULSA, Okla. (AP) _ A convenience store chain has posted petitions at its Oklahoma locations asking legislators to oppose a proposed tobacco tax increase. <br><br>Officials with Tulsa-based QuikTrip are

Saturday, February 28th 2004, 12:00 am

By: News On 6

TULSA, Okla. (AP) _ A convenience store chain has posted petitions at its Oklahoma locations asking legislators to oppose a proposed tobacco tax increase.

Officials with Tulsa-based QuikTrip are concerned that the plan by Gov. Brad Henry would widen the competitive gap between retailers and Oklahoma Indian smoke shops, Mike Thornbrugh, manager of public and government affairs for QuikTrip, said Friday.

The Oklahoma Grocers Association expressed the same opinion last week.

The petitions request lawmakers to vote against ``any new tax that would raise the price on tobacco products.''

State Finance Director Scott Meacham disagrees.

``They just don't want a higher cigarette tax,'' Meacham said, referring to QuikTrip.

The petition states: ``Dear Senator or Representative,

``I am 18 years old or older and reside in the state of Oklahoma.

``I encourage you to VOTE NO on any new tax that would raise the price on tobacco products.''

Thornbrugh said that ``in the Kansas City area, when Kansas increased its cigarette tax $5.60 a carton, we lost 35 percent of our cigarette sales and lost 25 percent of our other inside sales on the Kansas side. ... We did get most of it back on the Missouri side.

``For every dollar in tobacco sales, we sell another dollar in other products,'' he said.

Henry's proposal calls for eliminating state and local sales taxes on cigarettes and raising the current 23-cent-per-pack excise tax to $1, for a net increase of 52 cents per pack.

Some of the new revenue would go to local governments to compensate for lost sales taxes, and the rest would go to medical research and low-income health insurance.

Currently, Indian smoke shops collect only the 23-cent state excise tax, of which 17 cents is retained by the retailer. New compacts call for Indian smoke shops to remit 100 percent of any new tax, with tribal governments getting half of the increase back from the state.

That means the state would get about 44 cents from every pack and the tribes 39 cents under Henry's proposal.

Meacham and the Governor's Office argue that this arrangement benefits nontribal retailers by eliminating sales taxes on cigarettes. Because tribal shops don't collect state or local sales tax, this amounts to a roughly 25-cent-per-pack advantage.

New compacts bar tribes from subsidizing tobacco operations with the new tax money.

Thornbrugh, however, says that overall the tribes will be getting more money under the governor's program and that the lack of state control over that money worries QuikTrip.

``According to our figures, the tribes get $4.10 a carton under the old compacts and will get $5.50 a carton under the new,'' he said. ``That's a new source of untaxed capital.''

Thornbrugh said the state has little or no power to the ban the tribes from using the new compact revenues in smoke shop operations, and that directly or indirectly constitutes an unfair advantage.

But Meacham said the state has recourse if the tribes cheat, such as canceling the compact.