Okla. Stat. tit. 68, § 68-349.1

Conditions for exception - Native American tax free stamps.

A. Sales of cigarettes and other tobacco products by retailers

licensed by noncompacting federally recognized Indian tribes or

nations (hereinafter "tribe or nation") shall be subject to the

Oklahoma Statutes - Title 68. Revenue and Taxation Page 199

cigarette excise tax imposed by Section 302 et seq. of this title

and the excise tax on other tobacco products imposed by Section 402

et seq. of this title.

B. 1. Members of noncompacting federally recognized Indian

tribes or nations may purchase cigarettes and other tobacco

products, without payment of Oklahoma cigarette excise tax or

Oklahoma other tobacco products excise tax, subject to the following

conditions:

a. the member of the noncompacting federally recognized

Indian tribe (hereinafter "purchaser") is purchasing

for his or her personal use, and not for sale,

transfer or other disposition to another person or

entity,

b. the purchaser is purchasing from a retailer licensed

by the federally recognized Indian tribe or nation of

which the purchaser is a member,

c. the licensed retailer of purchaser's federally

recognized Indian tribe or nation is located upon

"Indian country" of that licensing tribe or nation, as

that term is defined by 18 USC Section 1151(a) and

paragraph 3 of Section 348 of this title.

2. Members of noncompacting federally recognized tribes or

nations are not entitled to purchase cigarettes or other tobacco

products, free of Oklahoma excise tax, from retailers licensed by

any other tribe or nation, compacting or not, but have a right to

purchase cigarettes and other tobacco products, free of Oklahoma

excise tax, upon the "Indian country" of the tribe or nation of

which the purchaser is a member, per the United States Supreme Court

decision "Oklahoma Tax Commission v. Citizen Band Potawatomi Indian

Tribe of Oklahoma", 498 U.S. 505 (1991).

C. Cigarettes held for sale to members of a noncompacting tribe

or nation by licensed retailers of that tribe or nation, which are

located on the "Indian country" of that tribe or nation, as defined

by 18 USC Section 1151(a) and paragraph 3 of Section 348 of this

title, must bear a stamp issued by the Oklahoma Tax Commission

evidencing that cigarettes are purchased free of Oklahoma cigarette

excise tax. The following procedures shall apply to said stamps

(hereafter, "Native American tax free stamps"):

1. The probable demand for Native American tax free stamps for

each noncompacting tribe or nation shall be determined by the Tax

Commission by ascertaining the total membership in Oklahoma of the

tribe or nation from the Bureau of Indian Affairs or other reliable

source of public information regarding such membership, and

multiplying that number by the percentage of smokers in Oklahoma or

in the United States, whichever is greater, based on the most recent

data available from the State Department of Health and/or other

reliable source of public information. The product of that

Oklahoma Statutes - Title 68. Revenue and Taxation Page 200

calculation shall be multiplied by the average yearly consumption of

cigarettes by smokers in Oklahoma or the United States, whichever is

greater, based on the most recent data available from the State

Department of Health and/or other reliable source of public

information. The resulting number shall be deemed to constitute the

probable demand for Native American tax free stamps of such

noncompacting tribe or nation for a calendar year.

2. A preliminary determination of probable demand shall be

furnished to the governing authorities of each noncompacting tribe

or nation which may submit, for consideration by the Tax Commission,

any verifiable information in its possession regarding such probable

demand, including, but not limited to, a verifiable record of

previous sales to tribal members or other statistical evidence.
ear.

2. A preliminary determination of probable demand shall be

furnished to the governing authorities of each noncompacting tribe

or nation which may submit, for consideration by the Tax Commission,

any verifiable information in its possession regarding such probable

demand, including, but not limited to, a verifiable record of

previous sales to tribal members or other statistical evidence.

3. After consideration of all verifiable information furnished

by a noncompacting tribe or nation pursuant to paragraph 2 of this

subsection, the Tax Commission shall make its final determination of

probable demand, and furnish such determination to the subject

noncompacting tribe or nation and to all Oklahoma-licensed cigarette

wholesalers.

4. Each calendar year, the Tax Commission shall establish, as

to any and all Oklahoma-licensed cigarette wholesalers supplying

cigarettes to tribally licensed or owned retailers of each

noncompacting tribe or nation an allocation of the probable demand

for such tribe or nation, based upon each wholesaler's previous

year's reported sales of cigarettes to the tribally licensed or

owned retailers of such tribe or nation. In making such allocation,

the Tax Commission shall consider such other verifiable information

as may be submitted by a licensed wholesaler or such tribe or

nation. Upon reaching a final determination of allocation, the Tax

Commission shall advise the affected wholesaler and the tribe or

nation.

5. Oklahoma-licensed wholesalers may request and receive from

the Tax Commission, at the beginning of each quarter of the year,

their allocated share of Native American tax free stamps for the

tribally licensed or owned retailers of each noncompacting tribe or

nation. Once a wholesaler has received its allocated share of

Native American tax free stamps for the tribally licensed or owned

retailers of a noncompacting tribe or nation for the quarter, that

wholesaler may not receive any further Native American tax free

stamps for tribally licensed or owned retailers of that tribe or

nation during the quarter, absent good cause shown by verifiable

information submitted by the wholesaler and/or that tribe or nation,

which shall be considered and determined by the Tax Commission on a

case-by-case basis.

6. The Tax Commission is empowered and authorized to promulgate

such rules and regulations as, in its discretion, shall be deemed

necessary to implement and enforce the provisions of this section.

Oklahoma Statutes - Title 68. Revenue and Taxation Page 201

7. The sale of cigarettes bearing the Native American tax-free

stamp to a nonmember of the tribe or nation which licensed the

tribally owned or licensed retailer shall, in accordance with the

United States Supreme Court decision "Oklahoma Tax Commission v.

Citizen Band Potawatomi Indian Tribe of Oklahoma", 498 U.S. 505
this section.

Oklahoma Statutes - Title 68. Revenue and Taxation Page 201

7. The sale of cigarettes bearing the Native American tax-free

stamp to a nonmember of the tribe or nation which licensed the

tribally owned or licensed retailer shall, in accordance with the

United States Supreme Court decision "Oklahoma Tax Commission v.

Citizen Band Potawatomi Indian Tribe of Oklahoma", 498 U.S. 505

(1991), obligate that tribal retailer for payment of the applicable

Oklahoma cigarette excise tax, together with the costs and attorney

fees associated with any civil action brought to collect the unpaid

Oklahoma cigarette excise tax. Such actions may be instituted in

the district court in and for the county in which the tribal

retailer is located.

D. The Oklahoma excise tax on all tobacco products other than

cigarettes (hereafter "other tobacco products") held for sale by

Oklahoma-licensed wholesalers shall be paid by the wholesaler and

stamps affixed thereto by the wholesaler pursuant to Section 403 of

this title, including those other tobacco products which may be

purchased by members of noncompacting tribes and nations on the

"Indian country" of such tribe or nation from a retailer licensed or

owned by such tribe or nation. The following procedures shall apply

to the tax-free sale of other tobacco products:

1. The probable demand for the tax-free consumption of other

tobacco products by members of each noncompacting tribe or nation

shall be determined by the Tax Commission by ascertaining the total

membership in Oklahoma of the tribe or nation from the Bureau of

Indian Affairs or other reliable source of public information

regarding such membership, and multiplying that number by the

percentage of users of such other tobacco products in Oklahoma or

the United States, whichever is greater, based on the most recent

data available from the State Department of Health and/or other

reliable source of public information. The product of that

calculation shall be multiplied by the average yearly consumption of

users of such other tobacco products in Oklahoma or the United

States, whichever is greater, based on the most recent data

available from the State Department of Health and/or other reliable

source of public information. The resulting number shall be deemed

to constitute the probable demand for the tax-free consumption of

other tobacco products by members of such noncompacting tribes or

nations for a calendar year.

2. A preliminary determination of probable demand shall be

furnished to the governing authorities of each noncompacting tribe

or nation, which may submit, for consideration by the Tax

Commission, any verifiable information in its possession regarding

such probable demand, including, but not limited to, a verifiable

record of previous sales to tribal members or other statistical

evidence.

3. After consideration of all verifiable information furnished

by a noncompacting tribe or nation pursuant to paragraph 2 of this

Oklahoma Statutes - Title 68. Revenue and Taxation Page 202

subsection, the Tax Commission shall make its final determination of

probable demand and furnish such determination to the subject

noncompacting tribe or nation and to all Oklahoma-licensed other

tobacco product wholesalers.

4. Each calendar year, the Tax Commission shall establish, as

to any and all Oklahoma-licensed other tobacco product wholesalers

supplying other tobacco products to the tribally licensed or owned

retailers of each noncompacting tribe or nation an allocation of the

probable demand for such tribe or nation, based upon each

wholesaler's previous year's reported sales of other tobacco

products to the tribally licensed or owned retailers of such tribe

or nation. In making such allocation, the Tax Commission shall

consider such other verifiable information as may be submitted by a

licensed wholesaler or such tribe or nation. Upon reaching a final
ion of the

probable demand for such tribe or nation, based upon each

wholesaler's previous year's reported sales of other tobacco

products to the tribally licensed or owned retailers of such tribe

or nation. In making such allocation, the Tax Commission shall

consider such other verifiable information as may be submitted by a

licensed wholesaler or such tribe or nation. Upon reaching a final

determination of allocation, the Tax Commission shall advise the

affected wholesaler and the tribe or nation.

5. Oklahoma-licensed wholesalers may request and receive from

the Tax Commission, on the 30th of each month, a refund and/or

credit for the previous month's tax-free sales of other tobacco

products, equal to the lesser of: one twelfth (1/12) of their

allocated share of tax-free sales of other tobacco products to the

tribally licensed or owned retailers of each noncompacting tribe or

nation or verifiable tax-free sales to the licensed or owned tribal

retailers of such tribe or nation. Once a wholesaler has received

such refund and/or credit for a previous month's tax-free sales to

the tribally licensed or owned retailers of each noncompacting tribe

or nation, that wholesaler may not receive any further refund and/or

credit for said previous month, absent good cause shown by

verifiable information submitted by the wholesaler and/or the

noncompacting tribe or nation, which shall be considered and

determined by the Tax Commission on a case-by-case basis.

6. The Tax Commission is empowered and authorized to promulgate

such rules and regulations as, in its discretion, shall be deemed

necessary to implement and enforce the provisions of this section.

7. The tax-free sale of other tobacco products to a nonmember

of the noncompacting tribe or nation which licenses the tribally

owned or licensed retailer shall, in accordance with the United

States Supreme Court decision "Oklahoma Tax Commission v. Citizen

Potawatomi Indian Tribe of Oklahoma", 498 U.S. 505 (1991), obligate

that tribal retailer for payment of the applicable Oklahoma other

tobacco product excise tax, together with the costs and attorney

fees associated with any civil action brought to collect the unpaid

Oklahoma other tobacco product excise tax. Such actions may be

instituted in the district court in and for the county in which the

tribal retailer is located.

E. The provisions of this section are intended to, and shall be

construed to apply only to, sales of cigarettes and other tobacco

Oklahoma Statutes - Title 68. Revenue and Taxation Page 203

products on the "Indian country" of noncompacting federally

recognized Indian tribes or nations to the members of such tribes or

nations. In the event that a noncompacting tribe or nation enters

into an agreement with the State of Oklahoma, pursuant to Section

346 of this title, the terms of such compact shall take precedence

over the provisions of this section, which shall have no application

to any tribe or nation, while any compact between the State of

Oklahoma and that tribe or nation is in force and effect.

F. All cigarettes which are sold or held for sale at tribally

owned or licensed stores shall have affixed thereto a stamp or

stamps evidencing payment or nonpayment of the Oklahoma cigarette

excise tax, as required by the provisions in this section.

G. It shall be unlawful for any person knowingly to ship,

transport, receive, possess, sell, distribute or purchase contraband

cigarettes. Any person who engages in shipping, transporting,

receiving, possessing, selling, distributing or purchasing

contraband cigarettes shall, upon conviction, be guilty of a

misdemeanor punishable by a fine of not more than One Thousand

Dollars ($1,000.00). Any person convicted of a second or subsequent

violation hereof shall be guilty of a Class D3 felony offense and

shall be punished by a fine of not more than Five Thousand Dollars
nsporting,

receiving, possessing, selling, distributing or purchasing

contraband cigarettes shall, upon conviction, be guilty of a

misdemeanor punishable by a fine of not more than One Thousand

Dollars ($1,000.00). Any person convicted of a second or subsequent

violation hereof shall be guilty of a Class D3 felony offense and

shall be punished by a fine of not more than Five Thousand Dollars

($5,000.00), by a term of imprisonment as provided for in

subsections B through F of Section 20P of Title 21 of the Oklahoma

Statutes, or by both such fine and imprisonment.

H. Any person who knowingly engages in shipping, transporting,

receiving, processing, selling, distributing or purchasing

contraband cigarettes shall be subject to the forfeiture of property

as is provided by Section 305 of this title and assessment of

penalty as provided thereby and assessment for any delinquent taxes

found to be owing.

I. Pursuant to 25 C.F.R., Section 140.17, no trader shall sell

tobacco, cigars or cigarettes to any Indian or other person under

eighteen (18) years of age.