A House committee delayed a decision Wednesday on a bill that would charge the state4s cigarette tax to packs sold on tribal reservations.
The vote to wait on the bill came after two hours of testimony, most of it against the measure by members of the state4s five tribes.
We4re talking about rural economies here, Nez Perce Tribal Chairman Samuel Penney said.
Penney said he found it ironic that he spent time recently at the kickoff of the nationwide Lewis and Clark Bicentennial promoting Idaho to people around the country, but he has to spend so much time in Boise defending his tribe4s sovereignty.
He was joined by Coeur d4Alene leader Ernie Stensgar, Blaine Edmo of the Shoshone-Bannock tribe and former Attorney General Larry EchoHawk in opposing the bill.
Tribal store managers and leaders from other tribes attended as well. Not only could the tax be devastating to tribal economies, they said, but it could end up cutting money for reservation services (paid for with tribal cigarette taxes) in favor of state services that may not even be offered on reservations.
Former state Rep. Don Pischner, who now represents a group of tobacco retailers, proposed and pitched the bill, which would make tobacco wholesalers pay the tax on all cigarette packs they distribute. Now, tribal sales are exempt, and though the U.S. Supreme Court has ruled the state can4t tax tobacco sales within the tribes, it is legal to make reservation stores charge the tax to non-tribal customers.
Pischner4s bill would address this by creating a complex formula for estimating how many cigarettes are actually sold to tribal members, and the stores would receive a rebate on those.
Pischner said it4s not fair to the tobacco retailers near reservations to have this competitive disadvantage, and he said cartons of cigarettes often sit unsold on store racks in northern Idaho.
Why would you buy a carton when you could pool your money and get a pickup load and bring them back home? he said.
Donna Simon, a tobacco seller from Post Falls, said her store is one that suffers.
We4re not trying to put everyone out of business, she said. We just want everyone to profit.
But Pischner worked to make other points, too. He said smoking has killed two of his friends and left another facing serious surgery. And he and one of two others to support the measure insinuated that tribal stores are more likely to sell tobacco products to minors.
But tribal leaders refuted that, and Challis GOP Rep. Lenore Barrett said experience shows non-tribal tobacco sellers have been caught doing the same thing.
Barrett and Pocatello Rep. Elmer Martinez tried to kill the bill Wednesday in the House Revenue and Taxation Committee, but they were outvoted by those who want to pass it and others who had more questions than answers by the end of the two-hour meeting.
Barrett said she thought the bill crossed tribal sovereignty lines, was impractical as it was written and was a tax increase.
I don4t propose to raise taxes on anybody or anything, she said.
And at first, it looked as if her motion would pass.
EchoHawk, who is now teaching law at Brigham Young University but still a special counsel for the Sho-Bans at the Fort Hall Reservation near Blackfoot, outlined the history behind the issue and laid out some of the reasons the tribes aren4t faced with the tax today.
In 1974, after the state Tax Commission tried to collect the tax on the Coeur d4Alene Reservation, the Idaho Supreme Court ruled the state had no jurisdiction. In the years that followed, the Sho-Bans and others began economic development projects based on these tax immunities.
Now, many of them rely on their own cigarette tax each reservation has a different level of taxation, and each applies it differently.
By 1980, when the U.S. Supreme Court said there was no obstacle to taxing cigarette sales to non-Indians, the tobacco businesses had provided enough income and jobs on reservations plagued by high unemployment and poverty that the Legislature forbid the Tax Commission from collecting them.
The reasons, EchoHawk said, were the same as they are today.
. Jobs unemployment was, and is, much higher on the reservations than anywhere else in the state.
. Tribal governments provide the primary services on reservations, including roads, schools, police and more.
. To change the law would be to upset the apple cart.
.The need for services, the need for jobs would still be there on the tribal reservations, he said.
He and the tribes called for a legislative study committee to look at how revenues and services play out on Indian lands.
The American Indians who spoke covered ground the committee hadn4t in its earlier discussion of the bill, but the majority Pischner thought he had might have held together if the tobacco wholesalers hadn4t spoken against the bill.
Idaho Wholesale Marketers Association lobbyist Karleane Allen said the changes have her members confused, even after talking to the state Tax Commission.
We don4t know how to do it, she said.
Rexburg Republican Rep. Dell Raybould made the motion to hold the bill for a week. It passed 11-7.