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Apr 23rd, 2008 - 13:23:04
The Oklahoma Tax Commission is one step closer to limiting the supply of low-tax cigarettes to tribal smoke shops in some areas of the state, including Tulsa. A restraining order that halted an Oklahoma Tax Commission rule limiting the sales of low-tax cigarettes by tribal smoke shops near the state line is likely to be lifted within 10 days. Meanwhile, although state officials have not abandoned creating several tobacco tax zones, the idea of having a single compact rate for all of the tribes is appealing, state Treasurer Scott Meacham said. "We are are not bailing out on the (multiple) stamps, but we would like to get to one rate that is more easily enforced so that we can move forward with decreasing smoking while raising more money for better health in Oklahoma," Meacham said. In January 2006, the state enacted an emergency rule limiting border-area smoke shops to 2004 cigarette sales levels plus 10 percent. It was an effort to stop the stores from reselling the cigarettes to stores in other areas of the state. The rule, known as Rule 12, was challenged in court by six tribal smoke shops in Mayes County. District Judge James Goodpaster issued a temporary restraining order on Rule 12 for the six Cherokee affiliated smoke shops. The low-tax stamps, which are 6 cents, are meant to be sold only in border areas to compete with lower tobacco taxes in other states. Nonborder-area tribal smoke shops are required to sell 86-cent stamps under the Cherokee Nation's compact with the state, signed in 2004. In 2005, 6-cent stamps began showing up in many nonborder-area tribal stores and in smoke shops owned by other tribes, such as the Creek Nation, which has no tobacco compact with the state. In March, an arbitration panel determined that Cherokee Nation-licensed smoke shops violated the compact by buying large quantities of low-tax cigarettes and reselling them outside the low-tax zone. Since then, the Cherokee Nation has disallowed retail-to-retail sales by tribally licensed tobacco retailers, including the six involved in the Mayes County lawsuit, and the tribe has begun monitoring smoke-shop sales, tribal spokesman Mike Miller said. On Tuesday, a hearing was set on a motion by the Oklahoma Tax Commission to re move the restraining order. The order was stricken from the docket after both sides' attorneys agreed to present a dissolution plan for the judge's approval. Paula Ross, an Oklahoma Tax Commission spokeswoman, said, "It is our understanding that our attorneys have been working together with the smoke-shop attorneys and that everyone has signed an agreement that will be presented to the judge for consideration for dissolving the" restraining order. "If the judge dissolves the order, and we have requested that he do that, then Rule 12 will be in force and the smoke shops would have to order (low-tax) cigarettes based on 2004 levels plus 10 percent." If the restraining order is dissolved, two smoke shops in particular, Pipestone Smoke Shop and Two Turtles Inc., would be limited to a fraction of their current sales levels of low-tax cigarettes. Those two Cherokee-licensed smoke shops supplied almost 2 million cartons of cigarettes to the Tulsa area in 2005. Two Turtles sold an estimated 500,000 cartons of cigarettes in 2005, compared with 29,000 cartons in 2004. Pipestone's sales jumped from about 32,000 cartons in 2004 to about 1.2 million in 2005, a Tulsa World investigation showed. The investigation revealed that many of the other smoke-shop owners in the lawsuit were not involved in selling low-tax cigarettes in Tulsa. © Copyright 2006 by DiscountCigarettesBox.Com Top of Page |
