FINAL BILL REPORT

SSB 5933

C 236 L 03

Synopsis as Enacted

Brief Description: Authorizing cigarette tax contracts between the state and additional Indian tribes.

Sponsors: Senate Committee on Commerce & Trade (originally sponsored by Senators Hargrove, Franklin and Kline).

Senate Committee on Commerce & Trade

House Committee on Finance

Background: Under federal law, the state cigarette tax of 142.5 cents per pack of 20 cigarettes does not apply to cigarettes sold on an Indian reservation to an enrolled tribal member for personal consumption. However, sales made by tribal cigarette retailers to non-tribal members are subject to the state tax.

In 2001, the Legislature authorized the Governor to enter into contracts regarding the taxation of the sale of cigarettes sold on Indian lands. In general, under a cigarette tax contract authorized by Chapter 43.06 RCW, such sales are subject to a tribal cigarette tax equal to the state cigarette and sales and use taxes, and are exempt from such state taxes. The rate may be phased in over three years, but can be no lower than 80 percent of the state cigarette and sales tax rate.

The Governor was originally authorized to enter into agreements with the Squaxin Island Tribe, the Nisqually Tribe, the Tulalip Tribes, the Mukleshoot Indian Tribe, the Quinault Nation, the Jamestown S'Klallam Indian Tribe, the Port Gamble S'Klallam Tribe, the Stillaguamish Tribe, the Sauk-Suiattle Tribe, the Skokomish Indian Tribe, the Nooksack Indian Tribe, the Lummi Nation, the Chehalis Confederated Tribes, and the Upper Skagit Tribe. Authority was subsequently granted to enter into agreements with the Yakama Nation, the Suquamish Tribe, the Snoqualmie Tribe, and the Swinomish Tribe.

Summary: Authority is granted to the Governor to enter into a cigarette tax contract with the Quileute Tribe, the Samish Indian Nation, and the Kalispel Tribe.

Votes on Final Passage:

Senate       48  0

House       86  0

Effective: July 27, 2003