Newspaper article THE JOURNAL RECORD

Tax Issue's Impact Disputed

Newspaper article THE JOURNAL RECORD

Tax Issue's Impact Disputed

Article excerpt

The furor over the gasoline sales tax exemption for tribal-owned service stations is little more than a tempest in a teapot, Bob Rabon, legal counsel for the Chickasaw Nation, said Monday.

Published state estimates on how much this will cost Oklahoma are highly exaggerated, Rabon said during a telephone interview from his Hugo office.

"Right now there are only 13 tribal-owned stations in the state, and I don't see a lot being added in the near future," he said. "These stations are all on land held in trust by the tribe, and for new stations to be added, the federal government would have to accept them in the trust. I don't see that happening any time soon."

Rabon was discussing a published report that Gov. Frank Keating would call a special legislative session after Labor Day to deal with the issue.

"I don't think there's anything the state can do acting on its own for this situation," Rabon said. "I feel that it will take an act of Congress for this to be done."

On June 14, the United States Supreme Court upheld lower court rulings that the 17-cent per gallon tax on gasoline is in effect a tax on the tribe, which is outlawed because each tribe has sovereign-nation status.

Oklahoma's existing law taxes gasoline sold to the retailer who has the option to pass the cost on to the consumer. A special session has been discussed to change to law to put the tax burden directly on the consumer, with the retailer merely collecting it as retailers do the sales tax.

"If they change the law to put the tax on the wholesaler or the refiner, that wouldn't change things because the tribes could easily become distributors or refiners if they wanted to avoid that tax," he said. "About the only relief would be to move it (the tax) downstream to the consumer."

An alternative would be for the tribes to sign a compact with the state governor, similar to a late 1980s' compact on tobacco sales at tribal-owned smoke shops. The Chickasaw council has approved such a plan "as long as it doesn't give the tribal-owned stations an unfair advantage over our non-Indian competitors," he said.

"In that instance, we'd each get a piece of the pie," Rabon said. …

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