As the Executive Director of Four Directions, I like to pay attention to the legislation coming out of Congress that affects Indian country—both good and bad. Unfortunately I have seen more bad than good. The STOP Act is a perfect example of BAD.
That is why leading Tribal Attorneys such as Lance Morgan, partner with Fredericks Peebles & Morgan; Dale White, General Counsel headquartered on the Akwesasne Mohawk Territory; Gabriel “Gabe” Galanda partner at Galanda Broadman PLLC of Seattle, an American Indian owned law firm; and many other Tribal Attorneys all agree the STOP Act is BAD for Indian country.
Although the cost of complying with the STOP Act will be staggering for Tribes, the main concern should be our sovereignty. Under this law State Tax Administrators and the States Attorney General Offices will now have direct access to Tribes, Tribal manufacturers and wholesalers’ tax filings. States will be able to use that data against Tribes. An alleged violation of state cigarette tax laws could be the basis to suspend or revoke a native manufacturer’s license.
So here is the real reason behind the STOP Act: Big Tobacco and States will profit. Tribal businesses will be eliminated. Our Sovereignty will be changed forever by this law which would allow the States to enforce their tax laws on our reservations. Under this law the States will be able to allege the Tribes have violated State Tax Laws and their business will be shut down. Compacts with Tribes will no longer be needed. What the PACT Act did not give the States, the STOP Act will.
In order to get support for this bill Congress is using the excuse of evils like smuggling and the funding of terrorists; organized crime and violent crime; and that this poses a serious risk to our national security. But the real reason is the loss of income to States which is an estimated $5 billion a year.
Tribes need to be aware of a Department of Treasury Report to Congress on Federal Tobacco Receipts Lost Due To Illicit Trade and Recommendations for Increased Enforcement submitted February 4, 2010 which states in part “It is also important to note that the framework governing alcohol, like tobacco, directly requires the protection of state interests as well as federal interests.”
The lack of Tribes being mentioned as part of the protection of interests should be of great concern.
Tobacco is an economic tool for Tribes not only to create jobs on the reservations but the revenues are used for the same purposes that State governments use, to provide education, roads, health, public safety and care for elders and the poor. What this law does is encroach upon our sovereignty by making Tribes enforce State Tax Laws and to take Tribal profits and return them to the States and Big Tobacco.
Here is the Tribal interpretation of the STOP Act:
Section 103(a) the marker would be designed to “facilitate collection of” all currently applicable state and federal taxes and to “facilitate the enforcement” of other federal laws against tribal manufacturers, wholesalers or distributors, such as the PACT Act.
Section 105(a) In other words, it forces tribal manufacturers, wholesalers, and importers to comply with state laws (even if not expressly subject to state taxation per Section 301). Importantly, it also forces tribal manufacturers to comply with state laws that implement the Master Settlement Agreement, something that tribes had nothing to do with.
Section 108(b) Section 108(b) likely interferes with certain Indian Treaty rights to travel for purpose of commerce, including tobacco commerce, unfettered from state and federal limitations. See, e.g.,The Treaty with the Yakama, 12 Stat. 951, Art. III (1859). Under the STOP Act, states no longer have an incentive to stay in compliance with these agreements because the execution of otherwise non-enforceable state regulations can now be facilitated in Indian Country by the United States and its Treasury and Justice Departments.
Section 301 disclaimer: However, as we have seen with the PACT Act, such provisions are not enough to deter states and Big Tobacco from seeking to destroy inter-tribal tobacco commerce via state regulation and taxation and federal enforcement.
Now if Congress is meant to protect our Sovereignty all it had to do was require all States to adopt a uniform tax to eliminate the tax rate differential among the States. The problem would then disappear or at least make it impossible to create a profit by these so called terrorists and smugglers. However, because each Congressional Delegate represents his/her prospective State this is not a likely or viable option. Thus the Tribes, their members and businesses must suffer the consequences from the loss of our Sovereignty to economic development.
Oppose the STOP Act. Contact Congress.
Oliver J. Semans is an enrolled member of the Rosebud Sioux Tribe.