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Wyoming legislative panel endorses tobacco tax compact bill

November 28, 2018

CHEYENNE, Wyo. (AP) — An interim legislative panel endorsed a bill Wednesday that seeks a compact between the state of Wyoming and its two American Indian tribes on levying an equal amount of taxes on tobacco products sold on the Wind River Indian Reservation.

“It’s a way to treat the tribal governments and the tribal people as sovereign in Wyoming and negotiate a way to handle cigarette taxes that ends up benefiting all the governments and does it in a government-to-government way,” Sen. Cale Case, R-Lander, said.

Currently, tobacco products sold on the reservation are not subject to state taxes.

Mark Larson, executive vice president of the Colorado Wyoming Petroleum Marketers Association, said the situation gives retailers on the reservation a great price advantage over retailers outside the reservation. The price disparity can amount to as much as $10 per carton of cigarettes, he said.

“It has been a sore spot for a long time in terms of smoke shops that are set up just literally blocks away from retailers that are charging the tax,” Larson said.

The draft bill endorsed by the Joint Revenue Committee directs the governor to negotiate a compact with the Northern Arapaho and Eastern Shoshone tribes to levy the same amount of taxes on tobacco products sold on the reservation.

In exchange, the tribes would keep the revenue from the tax and be able to spend the money as they wish. Outside the reservation, the tobacco tax revenue is earmarked to specific programs, such as programs helping people quit smoking.

Larson said the state has a similar compact with the tribes on levying gasoline taxes and so the situation is not unprecedented.

No one from the tribes testified on the proposal.

The bill will be presented to the full Legislature when it meets in January.

After endorsing the bill the committee elected not to revisit a proposal to raise state tobacco taxes. The proposal came up in last winter’s legislative session but was killed.

Joint Revenue Committee co-chairman Rep. Mike Madden, R-Buffalo, said he thought it would be premature to discuss raising state tobacco taxes before a compact with the tribes is completed.

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