Newspaper article THE JOURNAL RECORD

Walters Regrets Squabble on Indian Smoke Shop Tax

Newspaper article THE JOURNAL RECORD

Walters Regrets Squabble on Indian Smoke Shop Tax

Article excerpt

Gov. David Walters said he's sorry the squabble about enforcing the sales tax on Indian smoke shops "cropped out in a wild controversy, rather than a more systematic way." At his weekly news conference Tuesday, the governor also repeated his opposition to State Question 640, and said it probably would have no effect either way on a proposed capital improvement bond issue for state structures.

The Oklahoma House of Representatives this week passed a weakened House Bill 1979, which requires non-Indians buying cigarettes on tribal land to pay the state tax of 23 cents per pack. Authored by Rep. Jim Isaac, D-Midwest City, the bill was amended to remove provisions for enforcing the requirement.

Addressing the claim that Isaac's bill took some Indian tribes by surprise, Walters said given the quantity of bills filed for the legislative session, it was not unusual for there to be measures filed without much debate or attention.

"It certainly raises the more fundamental question _ to what extent are we as a state going to give preference to retail purchases on Indian land," Walters said, and he added that this could hypothetically be stretched to include all sorts of merchandise, including fuel products.

The U.S. Supreme Court has ruled that operators of Indian smoke shops could be ordered to collect sales taxes from non-Indians who buy cigarettes, while tribal members can buy them tax-exempt.

"The Supreme Court decision says the sale to non-Indians is a taxable item, and there may be some liability that accrues to the tribes," Walters said.

He said the bill seeks to "take what, in essence, is an operation that has never been defined, and many believe is illicit, and bring some definition to it." While the state has made an effort to be fair with the tribes on Indian sovereignty issues, "we can't completely abrogate our responsibilities to other citizens of the state," he said.

Walters said he met last spring with representatives of the Five Civilized Tribes, and he asked if there was a tax in lieu of a direct cigarette tax that could be assessed on sales. He said the gist of their response was that "they were not interested in talking about anything except a complete exemption on tobacco sales. …

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