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Tribal-State Tobacco Compacts

Posted by Kirke Kickingbird on 09/08/2003

Oklahoma Governor Keating gave notice that Tribal-State Tobacco Compacts in Oklahoma would not be renewed last year and then negotiations led to their extension through June 30, 2003. Governor Henry has continued to insist on renegotiated compacts. Under his administration the tobacco compacts were extended through September 30, 2003. The expiration of this "final" deadline has created additional pressures and controversy.

The state goal is to create the possibility of collecting additional revenue if the excise tax on tobacco is increased at some time in the future. The Governor's proposal keeps the current ratio of a 25% excise tax on the first 23 cents (the current Oklahoma tobacco tax). If the tax is increased, the state will collect 50% of the additional tax with the other 50% rebated to the tribes.

It remains to be seen whether or not the tribes and state can reach an agreement by the end of September or very soon thereafter, or whether the tribes and state return to litigation as a means to settle the tobacco tax dispute.

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