Bill Targeting Reservation Cigarettes Passed By House Critics Say It Will Create Tension, But Measure Has Senate Backing
A proposal to get tough with smokers who buy untaxed cigarettes at tribal smokeshops won House passage Thursday amid criticism it would only raise tensions with the tribes.
The proposal has the backing of Senate leaders, but a spokesman for Gov. Gary Locke said his boss believes a better approach would be continued negotiations with the tribes to collect and share revenue from Washington’s 82-cents-a-pack cigarette tax.
The temptation to buy untaxed cigarettes is strong in a state with the highest cigarette tax in the nation. State figures show that a carton of generic cigarettes sells for between $8 and $14.19 at a tribal smokeshop, while non-Indian retailers charge $17.81 to $24.29 for the same product.
Buyers who take the smokes off-reservation can be fined $250 for possession of one to 30 packs, $300 for possession of 30 to 40 packs, and $400 for more than 40. But arrests and fines are rare. Revenue officials say the state is losing about $60 million a year in tax revenue from smokeshop sales, and another $49 million from cross-border and military reservation sales.
Bill sponsor Tom Huff, R-Gig Harbor, said he believed the liquor board has the expertise to intercept more shipments of untaxed cigarettes to reservations and to catch non-Indian buyers as they drive off reservations with untaxed cigarettes.
“We’re just not enforcing” the law now, he said, contending that the revenue department lacks the will or tools to do the job. “They’re a tax collection agency, not an enforcement agency,” Huff said.
The measure is strongly opposed by Washington tribes, including the Puyallups and Quinaults, who have lobbied against it.
Their spokesmen argue, along with Locke, that a better approach would be a compact in which the tribes would collect the cigarette tax and share a portion of it with the state.
Huff said so far, the tribes have not been willing to share a significant amount of any tax take.
Rep. Jim Kastama, D-Puyallup, said he grew up along the Puyallup River and remembered when tension between tribal members and non-Indians was so high people carried rifles.
“I don’t want to see that type of tension again,” Kastama said.
xxxx HB2272 House Bill 2272, which passed 66-30, would make the state Liquor Control Board responsible for enforcing regulations banning delivery and purchase of untaxed cigarettes at smokeshops. That responsibility now lies with the state Department of Revenue, which bill-backers contend isn’t doing its job. The legislation would include $3 million to finance the hiring of 21 more enforcement officers for the liquor board.