Newspaper article THE JOURNAL RECORD

Cherokee Nation Picks Retired Judge to Arbitrate Cigarette Tax Dispute with State of Oklahoma

Newspaper article THE JOURNAL RECORD

Cherokee Nation Picks Retired Judge to Arbitrate Cigarette Tax Dispute with State of Oklahoma

Article excerpt

The Cherokee Nation has picked federal retired judge Thomas R. Brett as its arbitrator in its dispute with the state over the tribe's 2004 tobacco compact.

Brett served as a federal district court judge in Oklahoma's Northern District for 24 years - including a stint as chief judge from 1994-96 - before retiring in 2003. Brett is a past president of the Oklahoma Bar Association and the Tulsa County Bar Association. He was awarded the Oklahoma Bar Association's Ethics Award in 2001 and has been inducted into the Oklahoma Heritage Hall of Fame.

The Cherokees claim that in the tobacco compact they signed in February 2004, the state expressly agreed not to waive or forgive the sales tax on cigarettes - only to see the state Legislature and executive branch approve State Question 713, which eliminated the sales tax on cigarettes.

Mike Miller, communications officer for the Cherokee Nation, said that cut two-thirds of a smoke shop's normal business margin - a 37- cent buffer - that the compact had been intended to preserve.

After voters approved SQ 713 in November 2004, the Cherokees moved to renegotiate the compact before its implementation. When that failed, they called for arbitration.

The Cherokee Nation sought to renegotiate a tobacco compact that would be beneficial to both the state and the Cherokee Nation, officials said in a press release Tuesday. However, after more than a year, it has become clear that the state of Oklahoma prefers to try to unilaterally change the compact through its own legislative process and by changing tax commission rules. Therefore, the Cherokee Nation now has no choice but to proceed with arbitration as provided for in the compact.

Gov. Brad Henry announced plans for arbitration with the Cherokee and Osage Nations in late December, but that concerned the ongoing exemption rate tax controversy, involving the sale of low-tax cigarettes at smoke shops outside exemption-rate areas.

Concerned the state was losing up to $2 million in revenue each month, the Oklahoma Tax Commission approved emergency rules in January and February to limit those sales. The first set of rules to regulate smoke shop inventories and retailer-to-retailer sales, which Henry signed into law on Jan. …

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