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Denney introduces cigarette-tax incidence bill on reservation sales

Idaho House Speaker Lawerence Denney introduced legislation this morning to change the incidence of Idaho's cigarette tax, requiring essentially that it be charged by Indian tribes on reservations, but that the tribes would get rebates for the tribal taxes they charge, up to the amount of the state's tax, and tribal members purchasing cigarettes on the reservation would be exempt from the tax, as they are now. The bill would end up revenue-neutral - any additional taxes collected by tribes would be rebated back to them - but it would provide an incentive for tribes to match their tribal cigarette taxes to the level of state taxes.

Denney said the bill was driven by concerns regarding the national tobacco settlement and the possibility that Idaho could be sued, but he said it certainly has implications for proposed legislation to raise Idaho's cigarette tax by $1.25 a pack. With that change, Denney said, without his bill, “My contention would be that you would not decrease the smoking, you would change the point of purchase,” because he said cigarette-buying customers would just go to reservations for lower tax rates. Though the Idaho Indian Affairs Council is meeting today, Denney said he didn't consult it or Idaho tribes in crafting the bill. He did, however, give a copy to Indian Affairs Council Chairman Bob Nonini, R-Coeur d'Alene. “I suspect that they will discuss it,” Denney said.

He said the legislation was drafted by the Idaho Attorney General's office. Denney said he expects Idaho retailers to support it, though he said he's not consulted with them, either.


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Betsy Z. Russell covers Idaho news from The Spokesman-Review's bureau in Boise.

Named best state-based political blog in Idaho for 2013 by The Fix

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