Henry Goes After Tribal Smoke Shops

Oklahoma governor seeks new tobacco enforcement tools

Published in CSP Daily News

OKLAHOMA CITY -- Oklahoma Governor Brad Henry said that he will seek enhanced enforcement tools to better police and regulate the retail tobacco industry in the state, particularly tribal smoke shops.

Many of the enforcement mechanisms are aimed at a small group of wholesalers and smoke shop owners who have been circumventing new tobacco compacts and state laws by selling cigarettes with a lower, improper tax stamp. The governor said the proposed changes will help curtail that activity.

One thing we learned in recent months is [image-nocss] that our enforcement tools are outdated and insufficient to adequately regulate today's tobacco industry in Oklahoma, said Henry. These changes will help ensure that all wholesalers and retailers are complying with the law, particularly tribal smoke shop operators.

The governor's office worked with the Oklahoma Tax Commission to develop a comprehensive package of enforcement mechanisms, including:

Clarifying that wholesalers are responsible for payment of tobacco taxes. Increasing the penalties for violation of tobacco tax laws to $10,000 for the first offense and $25,000 for the second. Allowing inspection of tax stamp records of tobacco wholesalers and tribal smoke shop retailers by law enforcement officials, the media and the public. Clarifying that no wholesaler will be allowed to sell tobacco products to a tribe or tribal retailer for resale without such tribe or tribal retailer being licensed as a wholesaler by the state. Prohibiting wholesalers from selling tobacco to a retailer if it is known the retailer intends to resell the products to another retailer. Limiting the number of 6 cent border rate stamps to help prevent cigarettes intended only for border zones from being sold in other markets. Prohibiting Internet and mail-order sales of tobacco. Establishing a hotline to report any type of suspected illegal activity relating to tobacco sales.

Henry said he will ask the state legislature to approve the enforcement package when it reconvenes in February.

Initial reaction from area tribes to Henry's proposal appears to be cautious, reported the Native American Times.

The Cherokee Nation is looking for a reasonable long-term solution to the tobacco tax situation created by the state repealing the sales tax on tobacco. If the state feels these steps are necessary to enforce their own laws within their own jurisdiction, they are well within their power to do so, Cherokee Nation Principal Chief Chad Smith said in response. But we feel it would be better to have taken this discussion outside of the political arena and restore the focus to what makes the best public policy for all involved.

An Osage Nation spokesperson also called on state officials to enter into negotiations with state tribes on the controversial issue, said the report.

Oklahoma State Senator Cal Hobson was a key force in forging the agreement that led to the tobacco compact, it added. Hobson characterized the negotiations as pitting the Quick Trips of the world on one side and the tribes on the other, but said he was confident that a compromise could be reached.

We can get everybody together to discuss the issue and work out an agreement, Hobson told the newspaper. I understand that tribes are sovereign nations and negotiate as equals.

A tribal summit to discuss the tobacco issue has been scheduled for December 16 in Okmulgee, Okla. Representatives from the Cherokees, Osage and Muscogee (Creek) Nation will attend, the report said.