Showdown Sought On Tax-Free Smokes Liquor Board Gets 21 New Officers For Enforcement Near Tribal Smokeshops
Gov. Gary Locke late Monday signed a proposal to clamp down on smokers who buy untaxed cigarettes at tribal smokeshops. Some lawmakers warned the move could inflame old tensions between tribes and state government.
In other action:
The first-term Democrat also signed a measure making minor changes in the state’s 7-year-old land-use planning law. The Republican-led Legislature tried for a more severe rewrite of the state Growth Management Act. But the governor even vetoed sections of this milder measure that he said went beyond the recommendations of a special panel.
The governor vetoed a proposal to trim the state’s power to regulate business, saying it was heavy handed and he already has ordered agencies to streamline regulation.
Locke signed a measure to make the state Liquor Control Board responsible for enforcing regulations banning delivery and purchase of untaxed cigarettes at smokeshops. That responsibility now lies with the state Department of Revenue, but the Legislature contends Revenue has failed to enforce a law against non-Indians buying untaxed tobacco.
The legislation comes with $3 million to finance the hiring of 21 more enforcement officers for the liquor board, a process expected to take months.
Bill sponsor Tom Huff, R-Gig Harbor, said he believed the liquor board has the expertise to intercept more shipments of untaxed cigarettes to reservations and to catch non-Indian buyers as they drive off reservations with untaxed cigarettes.
“We’re just not enforcing” the law now, Huff said, contending that the Revenue Department, with little enforcement manpower, lacks the will or tools to do the job.
Huff believes the new law will mean more tobacco revenue for state coffers to pay for programs from health care to protection of Puget Sound. Revenue officials say the state is losing about $60 million a year in tax revenue from smokeshop sales, and another $49 million from cross-border and military reservation sales.
Others see only trouble ahead.
“I think this new approach is a mistake,” Rep. Jim Kastama, D-Puyallup, said Monday.
“People don’t seem to recognize that when you’re dealing with the tribes, you’re dealing with another nation. I’m worried that heavy enforcement could start up hostility with the tribes that we haven’t seen since I was a kid. I remember other attempts to do something about tribal tobacco sales, and I remember the hostility it generated,” he said.
Randy Scott, a lobbyist for the Puyallup tribe, said the state could be setting itself up for lawsuits brought by tribal members who legally buy untaxed tobacco, only to be stopped outside the reservation and checked for tobacco possession.
“How will enforcement officers tell by the look of a car if it belongs to a non-Indian or an Indian?” Scott asked.
The temptation to buy untaxed cigarettes is strong in a state with the second-highest cigarette tax in the nation - at 82 cents a pack. Alaska has the highest tax at $1 a pack, effective this coming Oct. 1.
Washington state figures show that a carton of generic cigarettes sells for between $8 and $14.19 at a tribal smokeshop, while non-Indian retailers charge $17.81 to $24.29 for the same product.
Buyers who take the smokes off-reservation can be fined $250 for possession of one to 30 packs, $300 for possession of 30 to 40 packs, and $400 for more than 40. But arrests and fines are rare.