Cigarette Seizures Spur Tribe To Sue State, Which Cites Lost Tax Revenue

The Yakama Indian Nation is suing the state to prevent it from seizing any more shipments of untaxed cigarettes.

The civil lawsuit in U.S. District Court in Spokane followed the state’s largest seizure of untaxed cigarettes in history. The tribe contends its status as a sovereign nation allows it to sell cigarettes on reservations.

The lawsuit against the state Department of Revenue asks that the confiscated cigarettes be returned to the tribe.

Revenue Department officers on Jan. 16 confiscated a truckload of unstamped, out-of-state cigarettes headed for the reservation. The 26,318 cartons had a retail value of $520,000.

The state levies a tax of $8.25 per carton. Each pack must have a stamp showing the tax was paid.

But cigarettes sold to Indians at stores on reservations are exempt from the tax. However, state officials have complained for years that many non-Indians buy cigarettes on reservations to avoid the taxes. The state contends it loses $60 million a year through sales at Indian smoke shops.