Tulsa World: State seizes truck filled with smokes

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State seizes truck filled with smokes
The low-tax stamp cigarettes were likely headed to smoke shops.

By OMER GILLHAM and CLIFTON ADCOCK World Staff Writers
Published: 12/17/2008 2:24 AM
Last Modified: 12/17/2008 2:28 AM

The state has tightened its grip on low-tax cigarettes being sold in high-tax zones by seizing a truck load of cigarettes apparently intended to supply Indian nation smoke shops in the Tulsa area, the Tulsa World has learned.

The Oklahoma Highway Patrol, working with the Oklahoma Tax Commission, confiscated 51,000 packs of low-tax cigarettes last week that were believed to be headed to the Creek Nation.

The truck was stopped Tuesday, Dec. 9, by troopers on Interstate 40, just west of Warner, said Paula Ross, Oklahoma Tax Commission spokeswoman.

While the Oklahoma Tax Commission could not verify the exact destination of the shipment, troopers discovered notations in the truck that read "Crkwhsle" and Sac and Fox, Ross said.

One of the last times the state seized or attempted to seize cigarettes headed for an Indian smoke shop was in 1993 at the Duck Creek Trading Post on U.S. 75 north of Okmulgee. In that case, state troopers attempted to stop a truck loaded with cigarettes that did not bear an Oklahoma tax stamp. A stand-off ensued after the truck pulled on to Indian land. The stand-off ended without an arrest or injuries.

The Stroud-based Sac and Fox Nation has a tobacco compact with the state and has stores that are authorized to sell low-tax cigarettes. The Creek Nation does not have a compact with the state, but numerous Creek-licensed stores have been able to sell low-tax cigarettes in the past.

Sac and Fox Nation Principal Chief George Thurman did not return a phone

message from the Tulsa World. Creek Nation officials were not aware of the situation, a spokesman said.

The name of the wholesaler who supplied the confiscated cigarettes is being kept confidential by the Oklahoma Tax Commission due to tax privacy laws, Ross said.

The cigarettes in question are considered low-tax because they have a 6-cent tax on them. That tax allows border-area tribal smoke shops to compete with their counterparts across the state line.

Non-border smoke shops have until recently had an 86-cent per-pack tax, though new compacts with the Cherokee and Osage nations have lowered the tax. Until recently, border stores sold the low-tax cigarettes to Tulsa-area smoke shops, who resold them to undercut nontribal stores by $3 to $4 a carton.

The state shut down a source for the low-tax cigarettes through the Cherokee- affiliated stores earlier this year. Additionally, the Creek stores were obtaining low-tax cigarettes through the Osage-affiliated stores, according to the World investigation.

But State Treasurer Scott Meacham said that the Osage source is now shut down. On Dec. 8, the Osage Nation signed a tobacco compact with the state that eliminated the low-tax rate and brought a promise by the Osages to not sell cigarettes to the Creeks or other tribes, Meacham said.

"The Osage source is gone to the Creeks and they categorically agreed to not supply cigarettes to other tribes, as well," Meacham said.The state has tightened its grip on low-tax cigarettes being sold in high-tax zones by seizing a truck load of cigarettes apparently intended to supply Indian nation smoke shops in the Tulsa area, the Tulsa World has learned.

The Oklahoma Highway Patrol, working with the Oklahoma Tax Commission, confiscated 51,000 packs of low-tax cigarettes last week that were believed to be headed to the Creek Nation warehouse.

The truck was stopped Dec. 9, by troopers on Interstate 40, just west of Warner, said Paula Ross, Oklahoma Tax Commission spokeswoman.

While the Oklahoma Tax Commission could not verify the exact destination of the shipment, troopers discovered notations in the truck that read "Crkwhsle" and Sac and Fox, Ross said.

One of the last times the state seized or attempted to seize cigarettes headed for an Indian smoke shop was in 1993 at the Duck Creek Trading Post on U.S. 75 north of Okmulgee. In that case, state troopers attempted to stop a truck loaded with cigarettes that did not bear an Oklahoma tax stamp. A stand-off ensued after the truck pulled on to Indian land. The stand-off ended without an arrest or injuries.

The Stroud-based Sac and Fox Nation has a tobacco compact with the state and has stores that are authorized to sell low-tax cigarettes. The Creek Nation does not have a compact with the state, but numerous Creek-licensed stores have been able to sell low-tax cigarettes in the past.

Sac and Fox Nation Principal Chief George Thurman did not return a phone message from the Tulsa World. Creek Nation officials were not aware of the situation, a spokesman said.

The name of the wholesaler who supplied the confiscated cigarettes is being kept confidential by the Oklahoma Tax Commission due to tax privacy laws, Ross said.

The cigarettes in question are considered low-tax because they have a 6-cent tax on them. That tax allows border-area tribal smoke shops to compete with their counterparts across the state line.

Nonborder smoke shops have until recently had an 86-cent per-pack tax, although new compacts with the Cherokee and Osage nations have lowered the tax. Until recently, border stores sold the low-tax cigarettes to Tulsa-area smoke shops, who resold them to undercut nontribal stores by $3 to $4 a carton.

The state shut down a source for the low-tax cigarettes through the Cherokee- affiliated stores earlier this year. Additionally, the Creek stores were obtaining low-tax cigarettes through the Osage-affiliated stores, according to the World investigation.

But State Treasurer Scott Meacham said that the Osage source is now shut down. On Dec. 8, the governor signed a tobacco compact with the Osage Nation that eliminated the low-tax rate and brought a promise by the Osages to not sell cigarettes to the Creeks or other tribes, Meacham said.

"The Osage source is gone to the Creeks and they categorically agreed to not supply cigarettes to other tribes, as well," Meacham said.

Clifton Adcock 581-8462
clifton.adcock@tulsaworld.com

Omer Gilham 581-8301
omer.gilham@tulsaworld.com

By OMER GILLHAM and CLIFTON ADCOCK World Staff Writers

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	Report Comment droopy, wagoner (12/17/2008 6:16:50 AM) Was everything repeated at least three times in this article?
	Report Comment my view, Sand Springs (12/17/2008 8:06:37 AM) When it all said and done the state will have to return these cigarettes. Only congress regulates interstate shipments.
	Report Comment scouter, Tulsa (12/17/2008 8:12:08 AM) Cherokee, Your right only Congress regulates Tribal Commerce. But the OTC regulates Commerce in the state on non tribal lands - like state highways.
	Report Comment @HomeInTulsa, (12/17/2008 8:31:57 AM) Cough, stink, and die. Cheaply.
	Report Comment my view, Sand Springs (12/17/2008 9:17:49 AM) scouter, I-40 is not a state highway. Bville, HomeIn, You both are on to something.
	Report Comment Skeptic, Tulsa (12/17/2008 9:38:17 AM) Does the state allow different tax rates for for other retailers whose businesses border other states? The same tax rate for cigarettes should apply to all....the tribes, Quiktrip, everyone. Having it any other way encourages corruption and requires more bureaucracy.
	Report Comment BayouGirl, Owasso (12/17/2008 11:11:20 AM) Skeptic, I agree. Why make it easier for smokers to find cheap cancer sticks. What happened to equality? If you want to kill yourself with cancer sticks and want to do it cheaply, drive for a while to get them. It will only cost you more gas! Right?
	Report Comment Tulsa World Staff Writer Clifton Adcock, Tribal Affiars reporter/ Web d00d (12/17/2008 1:04:21 PM) Skeptic: No, the state does not have any border rates for non-tribal smoke shops or stores. Early in the process of drawing up compacts (back in 2004 and 2005) there was a proposal floating around to allow non-tribal retailers to have border rates, but it never materialized. Also, if it was a non-tribal wholesaler that was transporting the cigarettes when the truck was stopped, the state should be on pretty solid ground in making the stop, since it regulates tobacco wholesalers.
	Report Comment VotedRepublican, Tulsa (12/17/2008 2:13:28 PM) I think the Native Nations should buy up all the property in America and kick out all the white man that refuse to pay them a hefty rent. Payback for all the rotten underhanded way that the land of our ancestors was taken from us.
	Report Comment wotko, Sapulpa (12/17/2008 4:39:13 PM) Many smokeshops are on tribal trust land, which is land held in trust by the US Government for a tribe. That makes tribal trust land also federal land.The state basically stole those cigarettes.If we gonna use the argument about the streets, then maybe we should just fly all of the tobacco products in. We don't enjoy special or preferentual treatment, we enjoy the rights guaranted to us by treaties. I don't smoke but I also don't think we should strip away anymore freedoms from people.
	Report Comment wotko, Sapulpa (12/17/2008 4:41:11 PM) Besides, tribes should never enter into compacts with the state as they diminish our sovereignty.
	Report Comment loudshirt, (12/17/2008 5:11:18 PM) FYI the Constitution says that Congress regulates interstate commerce not Indian commerce. Also the way congress regulates commerce is by delegating the authority to the states.
	Report Comment RGM, (12/18/2008 2:39:21 AM) Everyone is missing the point. There is a required tax on tobacco products. Pretty much every time we vote for a "sin tax" we increase the tax. Certain tribes have entered into agreements with the state to allow certain tobacco outlets, whether because of location or volume or other reason, to not have to pay as much per tax stamp for each pack of cigarettes. These lower tax cigarettes can only be sold in these designated locations. The "Dormant Commerce Clause" stated does not apply because there is no regulation of commerce going on. Instead there is a reduction of tax rates. Selling these low tax cigarettes in a location not allowed is tax fraud. It allows these stores to either (1) sell cigarettes at a much lower rate than neighboring retailers, driving competition down, or (2) selling the cigarettes at the same, or slightly lower rate, than neighboring retailers, and pocketing the difference. Imagine if...... suddenly this one Bob's Burgers nearby started charging 50 cents less for everything than the other Bob's Burgers. You'd go there rather than another one that may be closer, just to save some money. Now imagine if this Bob's was able to do this because they were cheating the system and buying their food without paying taxes, or by buying from non-approved sources. You be upset right? Ignore the fact that there were Indian tribes involved, this is tax fraud. If there were non Indian tax compacts around, they'd be getting hit too.
	Report Comment WindRider, Heavener (12/18/2008 8:10:47 AM) Guess you are not supposed to submit anything pro-smoker or negative about enforcement of drug laws my comments yesterday and the comments of many others were all deleted overnight so the web author could have comments only backing thier position.

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