Florida - non-Indian customers pay tax on tobacco at reservation shops..

July 13, 2009 - Included in the new tobacco tax bill signed into law by Governor Crist state lawmakers created a system so native Indians won't have to pay the tax but non-Indians purchasing cigarettes at reservation shops must pay the tax .

Legal precedent seems to back up the state's system. A 1985 U.S. Supreme Court decision, based on a California dispute, held that states could collect cigarette taxes from sales on tribal lands, but only from non-Indian customers.

Smokers, beware: If you have relied on the Seminole and Miccosukee tribes' smoke shops as a tax-free haven for cigarettes, think again. The tribes have begun charging the state tax on cigarettes for the first time since Florida imposed it 66 years ago, coinciding with the $1-a-pack state tax hike that took effect July 1. The new tax is $1.34 a pack. Florida began taxing cigarettes in 1943, but no Indian tribe collected it until now.

Gary Bitner, spokesman for the Seminoles, said the tribe hoped to reach an agreement with the state on how to divvy up the tax revenues, a concept similar to the gambling compact now being negotiated with Gov. Charlie Crist. ''While that process is coming together, I think the tribe just in good faith has moved ahead to charge the tax,'' Bitner said.

Cigarette sales at Indian smoke shops are a big business. About 25 million packs of cigarettes a year are sold on tribal reservations in Florida, the state Department of Business and Professional Regulation says. State economists estimate tribal cigarette sales could produce an extra $20 million in revenue, based on 15 million packs being sold with the $1.34 tax.

Reference: Florida Indian tribes levying cigarette tax bY JOSH HAFENBRACK, Sun Sentinel, 7/13/2009.

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