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OKLAHOMA CITY -- Convenience store owners here told a legislative interim study group that while they do not have a problem with tobacco compacts reached between the state and American Indian tribes, they would like to see the rules abided by, local Oklahoma City television station KOTV reported.
Retailers asked the group to return to a single tobacco tax stamp system, where all retailers pay the same amount and the state rebates money back to the tribes. Currently, the state Tax Commission issues seven different cigarette stamps, and the location of the store determines the taxes paid by the shop, the report stated. Nontribal stores have a $1.03 tax stamp, while a $0.86 tax stamp is reserved for stores owned by tribes that have compacts with the state, and some border tribal stores can qualify for a $0.06 tax stamp.
Retailers claimed that the least expensive stamps were being used in stores that were not eligible for them.
There are 219 tribal retailers in the state that sell cigarettes and 4,800 nontribal stores, and only 39 tribal retailers qualify for the lesser stamp, according to Don Williams, a lobbyist with the Oklahoma Wholesale Marketers Association, the report stated.
However, 66 percent of the total taxes collected from January 2005 to August 2007 were from the $0.06 tax stamps -- reaching $227.4 million, according to the report.
"We have no quarrels with the provisions of the compacts," Williams said. "We just want to see them enforced."
Some stores are abusing the $0.06 tax stamp at an unfair disadvantage to nontribal and tribal stores that are following the law, said Jim Griffith, owner of On Cue Marketing, operator of 35 convenience stores across the state. In addition, other stores sell contraband cigarettes from other states without paying any taxes, he said.
Griffith suggested stores should purchase one tax stamp, and legitimate tribal stores buying stamps at a lower rate would apply to the Tax Commission for a rebate for the difference in price.