FINAL BILL REPORT
HB 1915
C 208 L 05
Synopsis as Enacted
Brief Description: Authorizing the governor to enter into cigarette tax contracts with additional tribes.
Sponsors: By Representatives McIntire, Conway, Clements, McCoy, Williams and Chase; by request of Department of Revenue.
House Committee on Finance
Senate Committee on Ways & Means
Background:
The rate for the cigarette tax is 142.5 cents per pack of 20 cigarettes. Retail sales and use
taxes are also imposed on sales of cigarettes. Revenue from the first 23 cents of the cigarette
tax goes to the State General Fund. The next 8 cents are dedicated to water quality
improvement programs through June 30, 2021, and to the State General Fund thereafter. The
next 101 cents go to the Health Services Account. The remaining 10.5 cents are dedicated to
youth violence prevention and drug enforcement. Retail sales and use taxes are also imposed
on sales of cigarettes. The total rate for state and local sales and use taxes varies from 7
percent to 8.6 percent, depending on the location.
Under federal law, the cigarette tax 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 tax. Enforcement of state cigarette
taxes with respect to tribal retail operations has involved considerable difficulty and
litigation, with mixed results.
In 2001, the Governor was authorized to enter into contracts concerning the sale of cigarettes
with federally recognized Indian tribes located within Washington. Contracts must be for
renewable terms of eight years or less. Cigarettes sold on Indian lands under a contract are
subject to a tribal cigarette tax and are exempt from state cigarette and sales and use taxes.
In general, cigarette contracts must:
termination of the contract should violations not be resolved.
The original cigarette contract legislation authorized the Governor to enter into contracts 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. Subsequent legislation authorized contracts with the Yakama
Nation, the Suquamish Tribe, the Snoqualmie Tribe, the Swinomish Tribe, the Quileute
Tribe, the Samish Indian Nation, and the Kalispel Tribe.
Summary:
The Governor may enter into cigarette tax contracts with the Confederated Tribes of the
Colville Reservation, the Cowlitz Indian Tribe, the Lower Elwha Klallam Tribe, and the
Makah Tribe. The terms of the contracts must be the same as for previously authorized
contracts.
Votes on Final Passage:
House 96 0
Senate 44 0
Effective: July 24, 2005