Second rule on tribal tobacco tax collections adopted

Tuesday, February 21st 2006, 6:39 pm
By: News On 6

OKLAHOMA CITY (AP) -- The state Tax Commission is ignoring protests from American Indian tribes and is again cracking down on the sale of low-tax cigarettes by smoke shops licensed by the tribes.

The commission's vote Tuesday would apply to tribally licensed retailers that are associated with tribes that have a compact with the state. It would require those retailers to buy only cigarettes with a tax rate of 86 cents per pack.

The taxes would be sent to the Tax Commission, which then would rebate 40 cents back to the tribes to comply with the compacts.

The rule is an attempt to stop the practice of retailers being sold 6-cent stamps, which gives them a huge price advantage over non-tribal retail outlets.

State officials say the sale of cheap stamps is largely to blame for tobacco collections missing projections by about $4-million a month.

Governor Brad Henry must sign the new rule for it to become effective.