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State, tribes should seek common ground on tobacco tax agreements

by The Oklahoman Editorial Board Published: June 17, 2013

Tribal retailers have every right to maximize sales based on legally obtained advantages. Any retailer would do the same. But there's no reason for the tax difference to be so extreme. Oklahoma can't require tribal businesses to collect state tobacco tax on sales to tribal members. As a compromise, past compacts have simply allowed for a lower tax rate at tribal outlets.

Conservatives understand that if you want less of something, tax it more. Thus, excessive income taxes are detrimental because they discourage work. High tobacco taxes are beneficial because they discourage smoking. This is one reason a majority of Oklahomans voted for the 2004 tax increase. But the 6-cent per-pack border rate effectively gives Oklahoma the lowest tobacco tax rate in the nation.

Fallin has signed new tobacco compacts with the Kaw Nation, the Cheyenne and Arapaho Tribes and the Fort Sill Apache Tribe. None of those agreements includes border rates. Under those new compacts, tribal smoke shops will pay wholesalers the full $1.03 per-pack tax with the associated tribal government later being directly rebated half to three-fourths of the tax paid. That's a reasonable compromise which protects tribal interests, levels the retailer playing field and disincentivizes smoking across the board.

Surely this is an issue where tribal and state leaders can reach common ground for the common good.

by The Oklahoman Editorial Board
The Oklahoman Editorial Board consists of Gary Pierson, President and CEO of The Oklahoma Publishing Company; Christopher P. Reen, president and publisher of The Oklahoman; Kelly Dyer Fry, editor and vice president of news; Christy Gaylord...
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