Smoking Tax Forecast Hazy

By MICK HINTON World Capitol Bureau

Some nontribal stores are pushing for an end to a special 6-cent cigarette tax rate for tribal border shops.

OKLAHOMA CITY — The state should abolish the cheap 6-cent cigarette tax stamps granted to tribal smoke shops along the border, several convenience store operators told lawmakers Thursday.

Mick LaFevers, who operates 10 convenience stores in the LeFlore County area, said he has had to lay off 12 people because his cigarette sales have dwindled by 25 percent. LaFevers, who is competing against three tribal smoke shops operated by the Choctaw Nation, said he can’t think of any other taxes that are discounted because businesses are along a border.

Rep. Kevin Calvey, R-Del City, called a session of the House Revenue and Tax Committee on Thursday to hear complaints from nontribal retailers. They said problems started when the governor granted the 6-cent exception rate in tobacco compacts signed with some tribes.

Paul Sund, a spokesman for Gov. Brad Henry, said: “Big Tobacco couldn’t have scripted the hearing any better. It was a one-sided presentation designed to mislead Oklahoma voters and convince them they made a mistake when they approved State Question 713.”

Retailers said that when voters approved a cigarette tax of $1.03 a year ago, they did not realize the governor’s deal with the tribes would continue.

Indian smoke shops next to the Kansas and Texas borders are allowed to charge only 6 cents in cigarette taxes per pack, based on their compacts with the governor. Those next to Arkansas have agreed to charge 30 cents.

However, investigations by the Tulsa World show that tribal smoke shops in the Tulsa area are also selling cigarettes with the 6-cent stamp. The Creeks should be paying 77 cents a pack in cigarette taxes, and the Cherokees and Osages should pay 86 cents, based on their agreements with the state.

QuikTrip’s spokesman Mike Thornbrugh said the cigarette tax system should be drastically overhauled. He said it should be designed similar to motor vehicle taxes, in which everyone pays in the same amount and tribes receive rebates based on their compacts with the state.

State officials estimate that the state should be receiving nearly $4 million more a month in cigarette taxes, if the tribal shops were abiding by their agreements with the state.

There are about a half-dozen tax stamps, each a different color, making it difficult to keep track of cigarette stamps.

Shane Warden, the vice president of accounting for Love Travel Stops, said sales of cigarettes by the carton are down 80 percent in Love’s border stores, compared with a year ago. He said the tribal stores are selling a carton for about $24, but his convenience stores have to charge about $34.

Sen. Cal Hobson, D-Lexington, who wrote tobacco tax legislation last year, said Thursday’s one-sided hearing shows “Big Tobacco is back in Oklahoma.”

He continued, “Despite the millions of dollars Big Tobacco poured into the campaign to defeat the tobacco tax initiative last November, Oklahoma voters were smart enough to stand in defense of a healthy Oklahoma.”

Last year, voters approved a measure increasing the state excise tax on tobacco to generate funds for various health programs, including insurance for about 600,000 Oklahomans, a cancer research center and improvements to the state’s trauma care system. The tax increase went into effect Jan. 1.

Calvey said his committee would meet again Monday, when some smoke shop operators are expected to speak.

Mick Hinton (405) 528-2465

mick.hinton@tulsaworld.com