Office of Governor Gary Locke
FOR IMMEDIATE RELEASE - July 22, 2004
Contact:  Governor's Communications Office, 360-902-4136
Alt Contact:  Mike Gowrylow, Department of Revenue, 360-705-6603

Gov. Gary Locke, Yakama Nation Sign Cigarette Taxation Agreement

Gov. Gary Locke has signed a cigarette taxation agreement with the Yakama Nation, the 12th such agreement to be reached with tribes since talks began in 2001.

“This agreement ends decades of conflict over this issue,” Locke said. “It is an excellent example of how the state and tribes can benefit from government-to-government interaction.”

“I commend Governor Locke and the Department of Revenue for helping bring all sides together to reach this agreement,” said Jerry Meninick, chair of the Yakama Nation.

Under the agreement, the Yakama Nation will impose a tax on purchases from non-Indians equal to the combined state cigarette and sales tax. The revenue from this tax will be dedicated to supporting the tribe’s essential government services. In exchange, the state will not impose its tax on cigarette purchases by non-Indians from smokeshops located on the reservation.

The agreement is intended to remedy a situation where the state lost tax revenues when non-Indians purchased cigarettes from smokeshops located on Indian reservations without paying the state tax. Although non-Indians are subject to stiff fines if caught in possession of cigarettes that don't bear Washington tax stamps, enforcement has been difficult and controversial.

“This agreement should increase both state and tribal tax revenues,” Locke said. “It will equalize the price of cigarettes on and off the reservations so vendors can compete on price rather than the presence or absence of state tax.” State cigarette tax revenues are coming in above forecasts, in part due to agreements already in place with tribes.

The tribe and the state have made a commitment to work together as sovereigns to assure that the agreement is faithfully implemented. The tribe plans to phase in the tax, starting this fall.

The Department of Revenue has completed agreements with more than half of the 21 tribes that have expressed interest, and will continue working with remaining tribes on behalf of the Governor's Office. Agreements were signed last month with the Muckleshoot, Samish and Nisqually tribes. Other participating tribes include the Squaxin Island, Upper Skagit, Tulalip, Jamestown S'Klallam, Nooksack, Chehalis, Port Gamble S’Klallam and Swinomish tribes.

Davis Washines, secretary of the Yakama Tribal Council Law and Order Committee, explained that the Yakama Nation - which rarely signs agreements with the state - was receptive to an agreement resolving cigarette tax disputes because it was approached in a way that tribal leaders felt demonstrated respect for tribal sovereignty and a willingness to listen.

“The governor and the department committed six months to mutually solving this issue, rather than trying to do it in one day,” Washines said.

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