OKLAHOMA CITY (AP) – A Tulsa-based convenience store chain welcomes new negotiations on tobacco compacts between the state and Oklahoma tribes that would replace compacts a company spokesman on Friday called a “debacle.”
“We’re on record as saying years ago the tobacco compacts in our opinion should have been structured the same as the motor fuel compacts,” QuikTrip spokesman Mike Thornbrugh said Friday. “It sounds like the current administration is having the new compacts structured as one (tax) stamp instead of the stupid eight stamp structure.”
Gov. Mary Fallin earlier this year rejected a request that the current tribal tobacco compacts be extended and instead opened negotiations for new compacts calling for the tribes to pay the full $1.03 per pack state tax on cigarettes with the state reimbursing the tribes up to 50 percent. The compacts, which are expiring this year, provided for taxes ranging from six cents per pack to the full $1.03.
The lower taxes were for tribes near the state’s border with states such as Kansas and Missouri that have lower tobacco taxes.
Fallin’s office said agreements have been reached with seven tribes and negotiations are continuing with 20 others.
“The goal of the governor is essentially to get as close as we can to a uniform tax rate in the state of Oklahoma for tobacco products,” said Fallin spokesman Alex Weintz.
Increased taxes have also been credited with reducing smoking rates, but that is not the focus, Weintz said.
“If it decreases the rates of smoking it’s a happy byproduct, but it’s not a driving force behind our negotiation,” he said.
The Muscogee (Creek) Nation has reached agreement with the state and signed the new compact, which Principal Chief George Tiger said is “not a great compact” but provides benefits for the tribe.
“It was negotiation, not dictation, we do have a line of communication, if you will, to the governor’s office to talk about anything.” Tiger said. “As a noncompacted tribe and now a compacted tribe, it allows us to compete with other retail outlets that sells tobacco products,” Tiger said.
Tribes that sell tobacco products without a compact pay approximately 75 percent of the $1.03 per pack tax paid by non-tribal retailers.
The Chickasaw Nation is among the tribes still in negotiations with the state, said tribal Gov. Bill Anoatubby.
“The state has been very open about what they would like to see in the compact, just as we have been open with them,” Anoatubby said in a statement to The Associated Press. “We continue working together to find common ground and believe we will be able to work out a mutually beneficial agreement.”
Thornbrugh, the QuikTrip spokesman, said all tobacco sellers paying the same tax would create a level field of competition for customers, unlike the current compacts that he said drove customers away from non-tribal retailers who charged about $10 more per carton.
“It was just the biggest debacle I have ever seen,” Thornbrugh said.
“We would hope there is a provision (in the new compacts) that the rebates can’t be used to subsidize smoke shops and reduce the price of tobacco,” Thornbrugh said.
He pointed to the motor fuels agreement in which he said the tribes pay the same excise tax as other retailers and receive a rebate that can only be used for items such as tribal housing or medical clinics.