Indian Cigarette Sale Taxation Case
In Nisqually Indian Tribe v. Gregoire, No. 09-35725, an action claiming that the State of Washington breached a contract with plaintiff Indian tribe by entering into an agreement with another tribe, governing taxation of cigarettes at Frank's Landing in Washington, the court affirmed summary judgment for defendants where 1) plaintiff had no private right of action to enforce the statutes governing the parcel of land at issue; and 2) plaintiff's agreement with Washington did not grant it the exclusive right to sell cigarettes at Frank's Landing.
As the court wrote: "Washington law applies state sales and use taxes to the sale of tobacco by Indian retailers to non-Indians, even when the sale takes place in Indian country. Wash. Admin. Code 458-20-192(9)(a), (e). In practice, assessment and collection of these taxes has proven to be logistically difficult and has become a source of contention between the Indian tribes and the State. To address this issue, the State enacted a law allowing
the governor to enter into contracts regarding tobacco taxation ("tobacco tax contracts") with certain enumerated, federally-recognized Indian tribes. Wash. Rev. Code § 43.06.455. Under these contracts, an Indian tribe can collect tribal taxes, in lieu of state and local sales and use taxes, when a tribal member retailer sells tobacco in Indian country. Wash. Rev. Code §§ 43.06.450-460. To retain this tax revenue, then, tribes must use the funds for "essential" government services. Id. § 43.06.455(8)."
- Full Text of Nisqually Indian Tribe v. Gregoire, No. 09-35725