OKMULGEE, Okla. – The Muscogee (Creek) Nation National Council unanimously approved a tobacco tax compact proposal Thursday night, opening the door for the tribe’s first compact with the state of Oklahoma in more than five years.


If enacted, tribally-owned and licensed smoke shops will be taxed $1.50 per carton of 10 packs of 20 cigarettes, $1.88 per carton of 10 packs of 25 cigarettes and 14.6 percent on all other tobacco products purchased from licensed wholesalers through Aug. 30, 2017.

The tribe has not had a tobacco compact with the state since January 2005. Along with the Seneca-Cayuga Tribe and the Ft. Sill Apache Tribe, the Muscogee (Creek) Nation was one of a handful of Oklahoma tribes without a tobacco compact in 2011.

Compacting tribes remit a payment to the state instead of paying an excise tax at the same rate as non-tribally owned tobacco retailers. Those tribes that do not compact with the state instead remit the full $1.03 tax per pack of cigarettes sold to non-tribal members. Cigarettes sold to tribal citizens are exempt from sales tax. 

Under the terms of the Muscogee (Creek) Nation’s proposed compact, the tax exemption for tribal citizens’ tobacco purchases will end and the tribe will be expected to make a payment equal to 50 percent of the sales taxes levied on tobacco products sold in their smoke shops.

Also, under the terms of the compact, as part of a settlement of a pending lawsuit in Tulsa County (Okla.) District Court between the two governments, the tribe must pay the state $11.5 million dollars, including $1.5 million upon the document’s signing and annual $2 million installments.

While the Muscogee (Creek) Nation is making payments, the state has agreed to place a stay on its claims against the tribe. Once the settlement is paid in full, the state will dismiss all of its claims in the lawsuit.

“It isn’t everything we wanted, but this allows our smoke shops to be competitive again,” Principal Chief George Tiger said. “This gives our local communities the opportunity to make money.”

A signing ceremony and joint press conference with Gov. Mary Fallin is scheduled for 12:15 p.m. Friday in the Oklahoma state capitol building.

Despite paying anywhere from two to 17 times more than other tribes in excise taxes, Muscogee (Creek) smoke shops sold 268.7 million cigarettes in 2011, second only to the Cherokee Nation among Oklahoma tribes.

The terms and per-pack tax rates for each tribe’s compacts vary, with most smoke shop cigarettes carrying either a $.52 or $.86 stamp. A further discounted rate is available for tribal smoke shops within 20 miles of Oklahoma’s borders with Arkansas, Kansas or Missouri, which have lower tobacco tax rates. That rate – either $.06 or $.25 per pack – was not extended to the Creek Nation.

“We’re landlocked,” Tiger said. “Our compact does not have any provisions about our borders and I can’t speak to the terms of our neighbors’ compacts. I can only talk about this compact.”

The Muscogee (Creek) Nation is bordered by two tribes – Cherokee Nation and Osage Nation – that have border rates for some of their tribally-owned and tribally-licensed smoke shops.

Thursday’s vote came less than 48 hours before the council’s regularly scheduled August meeting. National Council Speaker Sam Alexander said the decision to call an emergency meeting rather than wait until Saturday was made in an effort to help speed business along.

“We have a pretty full agenda for Saturday,” Alexander said. “We wanted to get this out of the way so we can start moving forward.”

Okla. Attorney General Scott Pruitt, Gov. Mary Fallin and Muscogee (Creek) Nation Chief George Tiger sign the tobacco compact Friday in the Oklahoma state capitol building.

PHOTO BY CHRISTINA GOOD VOICE, COURTESY MUSCOGEE NATION NEWS