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Oklahoma, tribes working on new tobacco tax deals

Oklahoma Gov. Mary Fallin's office has been working to renegotiate contracts with each of the state's American Indian tribes regarding tax collected on tobacco sales. One tribe isn't happy with its deal and filed suit this week in federal court.
by Jennifer Palmer and Paula Burkes Modified: November 24, 2013 at 10:00 pm •  Published: November 24, 2013

In tribal nations, tobacco taxes fuel essential services for its members and translate into jobs, health programs and construction. The Comanche Nation alone receives more than $1 million a year in tax revenue from tobacco sales at its dozen licensed retailers.

That's why the Comanches initiated a court battle this week to get the best deal they can on their tobacco tax compact — an agreement which outlines how much of the tax revenue they share with the state.

In December, the governor's office began renegotiating compacts with all the tribes.

Rather than offering a one-size-fits-all deal, the consensus among tribal leaders was to come up with their own terms, said Steve Mullins, Gov. Mary Fallin's general counsel.

“Each tribe brought their individual unique concerns and we said, ‘We'll see what we can do,'” Mullins said.

That resulted in some unusual stipulations, such as the Kaw Nation agreeing to make a casino smoke-free and the Chickasaws bargaining to convert its vehicle fleet to run on compressed natural gas in exchange for a better tax rate.

Those fulfill joint public policy goals for Fallin, an outspoken anti-smoking governor.

While tobacco sales from tribal retailers are important moneymakers for the tribes, they also add to state coffers. Tribal tobacco sales generated $55.3 million for the state last fiscal year, according to the Oklahoma Tax Commission.

Comanches' conflict

This year, the Comanche Nation and the state negotiated terms of its compact, but the day before the current contract expired, the tribe learned several other tribes, including the Chickasaws, were given more favorable terms, according to a federal lawsuit filed this week. The tribe invoked a “most favored nation” provision found in their former contract, which allows a tribe to adopt the terms of another's compact.

State officials refused to recognize the compact and began issuing Comanche retailers black stamps — which allow a limited number of tobacco products to be sold tax free but only to tribal citizens. For all other tobacco sales, they were obligated to pay the full tax rate.

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by Jennifer Palmer
Investigative Reporter
Jennifer Palmer joined The Oklahoman staff in 2008 and, after five years on the business desk, is now digging deeper through investigative work. She's been recognized with awards in public service reporting and personal column writing. Prior to...
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by Paula Burkes
A 1981 journalism graduate of Oklahoma State University, Paula Burkes has more than 30 years experience writing and editing award-winning material for newspapers and healthcare, educational and telecommunications institutions in Tulsa, Oklahoma...
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I think they will say we have higher priorities than subsidizing smoking.”

Steve Mullins,
Gov. Mary Fallin's general counsel

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