Communications have ceased.
That is how Principal Chief Geoffrey Standing Bear explained the current negotiations for the Nation’s Tobacco Products Excise Tax Compact with the state of Oklahoma.
The Nation’s tobacco compact extended negotiation deadline of March 31 has come and gone. Without a tobacco compact, there is no revenue sharing agreement in place, state tax liability becomes murky, and a competitive advantage could be lost to those tribes who do have compacts, to name a few detrimental factors.
Smoke shop owners currently operating on the Osage Nation reservation are paying full price for tobacco products and not receiving a tax rebate. A price that could shut them down or force employee layoffs.
The 9th Osage Nation Congress heard an update from the Nation’s Tax Commission Board on March 31, the opening day of the Congressional Hun-Kah Session, but the update was in executive session.
The Osage News asked the Tax Commission Board for comment on the negotiations, but they declined. However, Chief Standing Bear said the board has been working with their attorney Wilson Pipestem of Pipestem Law, P.C., to lead the negotiations.
Standing Bear said the crux of the matter is not the tobacco negotiations, but the number of Osage Nation license plates currently traveling on Oklahoma’s 12 turnpikes. The Oklahoma Turnpike Authority cannot currently register ON car tags to charge a toll, and tribal members have been driving under the turnpike radar.
The Tax Commission Board and Standing Bear recently met with the head of the Oklahoma Turnpike Authority on negotiating a dollar amount that works for both entities – whether that’s charging per car, or charging a group rate – the negotiations are ongoing.
Standing Bear doesn’t think the two issues of a tobacco tax and motor vehicle tags should be in the same compact. He would like to see two separate compacts; that way, they could settle the motor vehicle tag issue at a later date and agree on the tobacco compact quickly so smoke shop owners can get some economic relief.
“Let’s not handle the Oklahoma Turnpike Authority as a compact matter because they’re an instrumentality of the state, true, but they try to run like a business, which they should, and I said let’s look at this as a business transaction,” Standing Bear said.
“And because when we start talking about sovereignty issues and putting those on the table, the matters get very complicated, and people have to be very restrained and protective, and this is really the issue here. The issue is how much money is owed and how much money could be owed for Osage Indians with tags to use the turnpike system,” he said.
Smoke Shop Owners
Meanwhile, smoke shop owners are in limbo.
Mvskoke Media reported an email went out from the Oklahoma Tax Commission to an unnamed tobacco wholesaler that stated the following:
“The following tribe’s tobacco compact extensions have expired effective March 31st, 2025. Muscogee Creek Nation, Osage Nation, Quapaw Tribe of Oklahoma, and Seminole Nation. All tobacco sales to these tribes will be at full rate and cigarette sales should have the green stamp applied to all packs as of April 1, 2025 until further notice.”
The Nation’s 10-year Tobacco Tax Compact of 2013 first expired on Dec. 31, 2023, but tribes were successful in getting a one-year extension against Gov. Stitt’s objections. The tribes were again successful at getting a three-month extension to March 31.
The seven smoke shops operating on the Osage reservation are independently owned by Osage citizens. PJ Mays, who owns three smoke shops, Osage Trading Co. 1, 2, and 3, said the smoke shop owners have not been privy to the negotiations and declined to comment.
Tobacco Compact Timeline:
- Feb. 17, 1993, Osage Tribe of Oklahoma enters into Tobacco Tax Compact with the state
- Dec. 16, 2003, Osage Tribe of Oklahoma renews Tobacco Tax Compact
- Dec. 12, 2008, Osage Nation renews Tobacco Tax Compact
- Oct. 31, 2013, Osage Nation renews Tobacco Tax Compact
- Dec. 29, 2023, Osage Nation and state agree to one-year extension on compact
- Jan. 30, 2025, Osage Nation and state agree to three-month extension on compact
- March 31, 2025, compact extension ends.
With additional reporting by Allison Herrera
