Cherokee Nation Welcomes New Tobacco Compact With Oklahoma

By Author: Bernard Fowler
Total Articles: 27
Comment this article

This month the Cherokee Nation Council adopted a law which will establish a new tobacco compact with Oklahoma state, Indian Country.
The Cherokee Nation-State of Oklahoma Tobacco Tax Compact Act of 2013 is created to offer greater benefits to tobacco shop owners with Cherokee tribal jurisdictions in northeast Oklahoma while permitting Oklahoma to gather 100% of its tax revenue share upfront.

“It is going to be a great victory for all parties involved,” said Cherokee Nation Principal Chief Bill John Baker. “The state will get its share, local smoke shop owners will do better than they ever did under the previous agreement, and the Cherokee Nation will recapture some of the lost market share within our authority.”

Under the Cherokee Nation’s previous agreement, the Nation gathered a $1.50 tribal tax and the State gathered 50% of all applicable state cigarette taxes for sales to tribal retailers. The tribe was not permitted to reduce any part of the tribal tax to tobacco retailers.
The new agreement gradually lowers tribal tax levels on cigarette cartons by retailers. Through the end of 2013, ...
... the tax rate will be $3.65 per carton, with an eventual tax rate of $.80 per carton by October 1, 2014.

By May 1, 2018, tax revenues will be split 50/50 between the Cherokee Nation and Oklahoma. That split will continue through the end of the agreement on December 31, 2024.

Tax revenue splits for all other tobacco products will be 65/35 between the Cherokee Nation and Oklahoma through December 31 2017, and a 50/50 revenue distribution beginning January 1, 2018 through the end of the compact.

Since 1991, Oklahoma was authorized to gather state taxes on tobacco products sold by tribal businesses to non-tribal members. According to Cherokee Nation Deputy Speaker Janelle Fullbright, the new tobacco act demonstrates their support as a government for these tobacco shop owners and all the people they employ. They hope that the agreement will increase sales revenue to benefit tribal retailers and retain hundreds of jobs within the tribal jurisdiction.