Friday, March 6, 2009
We Want Half
Up till now most of the battles over the tobacco business on Native lands have been with the states. By and large most of those fighting for the right of Native people to carve out a market share of an industry with its origins in their own history and culture have looked the other way when it came to challenging the Feds. For over thirty years the federal excise tax has been paid with very little resistance. Up till recently, almost all the the products sold on Native land were produced by US manufacturers or imported by US distributors. Now Native brands have grabbed some major market share, at least on reservation sales. What once was just retail of established brands has become manufacturing, importing, wholesaling, marketing and retail that ranges from brick and mortar stores to e-commerce. For the Feds part they have quietly collected excise tax on the products before the product could leave their factories or customs agents and have played the spectator in the battle between the states and the Native people. With Native entrepreneurs becoming manufacturers and importers they found themselves in the awkward position of paying the federal taxes themselves directly. Some of the manufacturers dabbled with the sovereignty position and opposed the ATF regulations that called for the excise tax, but at $3.90 a carton, paying the tax was better for the overall business. Now in a the new era of unprecedented federal maneuvering, the excise tax has been raise to $10.00 per carton. To this the communities must tell the Feds, "Fine! But we want half". Communities that have product manufactured or exclusively imported for Native sales should have the option of having half, or $5.00 per carton, put into their own coffers. The feds will still see a significant increase from $3.90 on Native products and a dramatic increase on their domestic product sold by Native retailers. This process would allow much needed revenue for Native communities without placing higher tax burdens on Native products. As far as the Feds are concerned the $10.00 would be paid across the board on all cigarettes, but on Native products half would stay where it is needed most.