{"data":{"id":"us-ok/okla.-stat.-tit.-68-68-346","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 68, § 68-346","heading":"Legislative findings - Intent of Legislature - Cigarette","body":"and tobacco products tax compacts - Audits.\n\nA. The Legislature finds that:\n\n1. Federal law recognizes the right of Indian tribes or nations\n\nto engage in sales of cigarettes and tobacco products to their\n\nmembers free of state taxation;\n\n2. The doctrine of tribal sovereign immunity prohibits the\n\nState of Oklahoma from bringing a lawsuit against an Indian tribe or\n\nnation to compel the tribe or nation to collect state taxes on sales\n\nmade in Indian country to either members or nonmembers of the tribe\n\nor nation without a waiver of immunity by the tribe or nation or\n\ncongressional abrogation of the doctrine; and\n\n3. The Supreme Court of the United States, in \"Oklahoma Tax\n\nCommission v. Citizen Band Pottawatomie Indian Tribe of Oklahoma\",\n\nsuggested that a state may provide other methods of collection of\n\nstate taxes on sales of cigarettes and tobacco products made by\n\nIndian tribes or nations to persons who are not members of the tribe\n\nor nation, such as entering into mutually satisfactory agreements\n\nwith Indian tribes or nations.\n\nB. It is the intent of the Legislature to establish a system of\n\nstate taxation of sales of cigarettes and tobacco products made by\n\nfederally recognized Indian tribes or nations or their licensees,\n\nother than such tribes or nations which have entered into a compact\n\nwith the State of Oklahoma pursuant to the provisions of subsection\n\nC of this section, under which the rate of payments in lieu of state\n\ntaxes is less than the rate of state taxes on other sales of\n\ncigarettes and tobacco products in order to allow such tribes or\n\nnations or their licensees to make sales of cigarettes and tobacco\n\nproducts to tribal members free of state taxation.\n\nC. The Governor is authorized by this enactment to enter into\n\ncigarette and tobacco products tax compacts on behalf of the State\n\nof Oklahoma with the federally recognized Indian tribes or nations\n\nof this state. The compacts shall set forth the terms of agreement\n\nbetween the sovereign parties regulating sale of cigarettes and\n\ntobacco products by the tribes or nations or their licensees in\n\nIndian country. All sales in Indian country by those compacting\n\ntribes or nations and their licensees shall be exempt from the taxes\n\nlevied pursuant to the provisions of Section 301 et seq., Section\n\n401 et seq. and Section 1350 et seq. of Title 68 of the Oklahoma\n\nStatutes and Sections 349 and 425 of this title, subject to the\n\nfollowing terms and conditions:\n\n1. A payment in lieu of state sales and excise taxes, as\n\nprovided for in said compact, shall be paid to the State of Oklahoma\n\nby the tribes or nations, their licensees or their wholesalers upon\n\npurchase of all cigarettes and tobacco products intended for resale\n\nin Indian country by the tribes or nations or their licensees;\n\n2. All cigarettes and tobacco products sold or held for sale to\n\nthe public, without distinction between member and nonmember sales,\n\nshall bear a payment in lieu of tax stamp evidencing that payment in\n\nlieu of state taxes has been paid to the state. State and tribal\n\nofficials may provide for use of a single joint stamp evidencing\n\npayment of both the payment in lieu of tax as specified in a compact\n\npursuant to the provisions of this section and any tax levied by a\n\ntribe or nation;\n\n3. In the event that a compacting tribe or nation fails to\n\ncomply with all terms and conditions of the compact including, but\n\nnot limited to, requirements to include all state taxes required by\n\nthe terms of the compact to be collected by the tribe or nation in\n\nthe price of its cigarettes or tobacco products, the tribe or nation\n\nshall not be eligible to receive any payment due from the state\n\npursuant to the terms of the compact for the tax-reporting period\n\nduring which the noncompliance occurred;\n\n4. Records of all sales of cigarettes and tobacco products to\n\nthe tribes or nations and their licensees shall be kept by all\nted by the tribe or nation in\n\nthe price of its cigarettes or tobacco products, the tribe or nation\n\nshall not be eligible to receive any payment due from the state\n\npursuant to the terms of the compact for the tax-reporting period\n\nduring which the noncompliance occurred;\n\n4. Records of all sales of cigarettes and tobacco products to\n\nthe tribes or nations and their licensees shall be kept by all\n\nwholesalers doing business in the State of Oklahoma and shall be\n\nmade available for inspection by state officials on a timely basis.\n\nCopies of all invoices of wholesale sales of cigarettes or tobacco\n\nproducts to tribally owned or licensed retail stores shall be\n\nforwarded by the wholesaler to the Oklahoma Tax Commission; and\n\n5. For purposes of a compact pursuant to the provisions of this\n\nsection, the term \"tribal licensee\" shall only extend to:\n\na. members of the tribe or nation, and\n\nb. business entities in which the tribe or nation or\n\ntribal members have a majority ownership interest.\n\nD. In addition to any other authority granted by law, the Tax\n\nCommission shall regularly conduct an audit of wholesalers,\n\ndistributors, jobbers and warehousemen selling cigarettes or tobacco\n\nproducts to a federally recognized Indian tribe or nation or a\n\ntribally owned or licensed store to determine if the correct amount\n\nof tax payable under this act has been collected and to determine\n\ncompliance with any and all compacts.","path":["OK Code","Title 68"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os68.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"1cfd3bd6ab4074af8e77a3871bc8b7acff04d3c77fc1f2e453c8619310eeb91b","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-68-68-345","next":"us-ok/okla.-stat.-tit.-68-68-346.1"},"notice":"GroundRules: Original legal text. Not legal advice."}