Change in PM USA Contract Policy Impacts Tribal Shops
In Oklahoma, tribal smoke shops are concerned that their supply of top-brand cigarettes will be limited due to recent changes in Philip Morris USA’s contract policy, reports the Tulsa World. In March, PM USA informed wholesalers that it will be curtailing the number of cigarettes wholesalers can sell to tribal retailers who resell to other retailers. Under the new policy, PM USA can fine wholesalers who offer more than a certain number of cigarettes to such retailers.
While non-tribal stores buy cigarettes with a $1.03 tax stamp, the Muscogee (Creek) Nation smoke shops have been selling low-tax cigarettes affixed with a 6-cent tax stamp along the state border in order to compete against neighboring states with lower tax rates. They have obtained the low-tax cigarettes from Cherokee and Osage stores but fear that their source will dry up.
“The only way we can get around what (Philip Morris) . . . is doing is to enter into a compact with the state so we can buy directly from the wholesalers,” said Dana Johnson, the Muscogee Nation’s tax commissioner. She added that the tribe’s National Council will likely address this issue at its monthly meeting and approach the Oklahoma governor’s office about a new compact.
