Guess how the state has decided to deal with the fact that most of the Indian tribes in Washington don’t collect and remit taxes on reservation cigarette sales to non-tribal members, despite being ordered to do so three times by the U.S. Supreme Court?

They’re going to let the tribes levy their own cigarette taxes equal to and in lieu of what the state levies, and keep the money.

Reasoning behind this is that if the price in Indian smoke shops is the same as what it is off reservation where taxes must be collected, non-tribal members won’t bother to go there, but make their purchases at private retail establishments instead. That’s what’s hoped anyway.

And we’re talking real money here. Loss from illegal sales of untaxed cigarettes on Indian reservations alone in Fiscal Year 2000 is estimated by the Department of Revenue at $63.3 million.

How do they know that? According to statistics provided by DOR, which is requesting this legislation, it’s assumed, based on national usage, that this state has a consumption rate of 73.3 packs per person. Revenue sold tax stamps on 52 packs per person in FY 2000, which means 21.3 packs per person were consumed on which tax was not paid.

Using Washington’s population as 5.8 million, total sales of untaxed cigarettes came to 123.8 million packs. From that, subtract the 18.1 million packs in legitimate sales to the 259,864 military and their dependents in the state, and 8 million in legitimate Indian sales to tribal members, none of whom have to pay the taxes. You wind up with 96.7 million packs illegally sold tax-free.

Total loss to the state from military sales, Indian sales and casual smuggling was $105.4 million due to evasion of the 82.5 cents cigarette tax, 6.5 percent state tax, 1.5 percent local sales tax and 0.471 percent business and occupation tax.

DOR estimates loss from illegal sales in Indian stores at 60 percent or $63.3 million in that one year alone. And this has been going on for years, the tribes continuing to defy the law even after the first U.S. Supreme Court order in 1980 telling them to collect and remit the taxes.

How do they get away with it? “The court,” said Gary O’Neil of DOR, “didn’t provide the state with very much enforcement authority.” The State Liquor Control Board handles enforcement but officers can’t go on federal reservations without agreement so they have to nab vehicles coming in with untaxed cigarettes or arrest non-tribal members with them on their person.

Anyway, it was decided to give a try to having the governor enter into cooperative agreements with the tribes for them to impose their own tax instead of the state tax, and keep the money. The state wasn’t getting it anyway so this might at least cut down on sales to non-tribal members.

A tribe has three years to phase in its tax which must be 100 percent of what the state should be collecting, and can’t be below 80 percent during that time. The money must be used for “essential government services,” defined as “tribal administration, public facilities, fire, police, public health, education, job services, sewer, water, environmental and land use, transportation, utility services and economic development.” Cigarettes must be purchased from legitimate wholesale sources.

The bill says cooperative agreements “may” provide for submission of disputes for judicial resolution, with limited waivers of sovereign immunity on both sides, which looks like a sticky wicket to me, but nine tribes are signed up to go: Squaxin Island, Nisqually, Tulalip, Muckleshoot, Quinault, Jamestown S’Klallam, Port Gamble S’Klallam, Stillaguamish and Sauk-Suiattle.

Expanding reservation life expands and ensures the poverty and joblessness there now. How many Indian lawyers and doctors and professors do you see compared to other minorities? Reservation Indians have been mired in poverty for 150 years due to dependence on government handouts. If this tax is to be transferred, let it be geared to producing and educating Indian leaders, rather than fattening up a reservation bureaucracy. (Adele Ferguson can be reached at P.O. Box 69, Hansville, Wa., 98340.)

(Adele Ferguson can be reached at P.O. Box 69, Hansville, Wa., 98340.).