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(1) Purpose. The Samish Tribal Council finds that regulation of the sale of cigarettes, tobacco products and vapor products is essential to the health and welfare of the Samish Indian Nation and its citizens. The Tribal Council further finds that such a tax base is essential to the Tribe’s ability to provide goods and services, and to finance government operations and economic development, for the safety, health and welfare of the Samish Indian Nation, its citizens, and those who work on, live on, and visit the Tribe’s Indian Country. Therefore, in the public interest and for the welfare of the people of the Samish Indian Nation, its employees, the residents of and visitors to its Indian Country, the Samish Tribal Council, in the exercise of its authority under the Tribal Constitution, declares its purpose by the provisions of this section to regulate the sale of cigarettes, tobacco products and vapor products and to impose, collect and administer taxes on the sale of cigarettes, tobacco products and vapor products.

(2) Application of Tax.

(a) Sales subject to the Tribal cigarette, tobacco products and vapor products taxes are those in which delivery and physical transfer of possession of the cigarettes, tobacco products or vapor products from the retailer to the buyer occurs within Samish Indian Country.

(b) “Delivery and physical transfer of possession” within Samish Indian Country does not include mail order type sales, including internet, catalog, and telephone sales, unless the cigarettes, tobacco products or vapor products are delivered to the buyer or any person within Samish Indian Country.

(c) Sales made to Samish citizens for personal use are not subject to the Tribal cigarette, tobacco products and vapor products taxes; provided, that the retailer and buyer must still comply with all other provisions of this section.

(3) Compliance With Cigarette Tax Compact. In addition to the laws prescribed in this section, the sales of cigarettes by the Samish Indian Nation and the assessment and collection of taxes thereon shall be conducted in compliance with the Tribe’s cigarette tax compact with the State of Washington, unless or until such compact is terminated or expires. Such compact does not apply to the sales of tobacco products or vapor products.

(4) Definitions. For purposes of this section, the following definitions shall apply:

(a) Auditor” means an independent third-party auditor selected pursuant to the compact.

(b) Carton” or “carton of cigarettes” means a carton of 200 cigarettes.

(c) Cigarette” means any roll for smoking made wholly or in part of tobacco, irrespective of size or shape and irrespective of the tobacco being flavored, adulterated, or mixed with any other ingredient, where such roll has a wrapper or cover made of paper or any material, except where such wrapper is wholly or in the greater part made of natural leaf tobacco in its natural state.

(d) Compact” means the current compact in effect between the State of Washington and the Samish Indian Nation concerning cigarette sales and taxes.

(e) Non-Indian” means an individual who is neither a Samish Tribal Citizen nor a nonmember Indian.

(f) Nonmember Indian” means an enrolled member of a federally recognized Indian tribe other than the Samish Indian Nation.

(g) Self-certified Tribal wholesaler” means a wholesaler who is a federally recognized Indian tribe or a citizen or member of such a Tribe, who is not required to be licensed under any State law.

(h) Self-certified wholesaler” means an out-of-state wholesaler who is not a self-certified Tribal wholesaler.

(i) Tobacco products” means cigars, cheroots, stogies, periques, granulated, plug cut, crimp cut, ready rubbed, and other smoking tobacco, snuff, snuff flour, cavendish, plug and twist tobacco, fine-cut and other chewing tobaccos, shorts, refuse scraps, clippings, cuttings and sweepings of tobacco, and other kinds and forms of tobacco, prepared in such a manner as to be suitable for chewing or smoking in a pipe or otherwise, or both for chewing and smoking. “Tobacco products” does not include cigarettes or vapor products.

(j) Tribal tax stamp” means the stamp or stamps that indicate the Samish Indian Nation cigarette tax imposed under this section and the compact is paid or that identify those cigarettes with respect to which no tax is imposed.

(k) Vapor product” means any noncombustible product containing a solution or other consumable substance, regardless of whether it contains nicotine, which employs a mechanical heating element, battery, or electronic circuit regardless of shape or size that can be used to produce vapor from the solution or other substance, including an electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, or similar product or device. The term also includes any cartridge or other container of liquid nicotine, solution, or other consumable substance, regardless of whether it contains nicotine, that is intended to be used with or in a device that can be used to deliver aerosolized or vaporized nicotine to a person inhaling from the device and is sold for such purpose.

(i) The term “vapor product” does not include:

(A) Any product approved by the United States Food and Drug Administration for sale as a tobacco cessation product, medical device, or for other therapeutic purposes when such product is marketed and sold solely for such an approved purpose;

(B) Any product that will become an ingredient or component in a vapor product manufactured by a distributor; or

(C) Any product that meets the definition of marijuana, usable marijuana, marijuana concentrates, marijuana-infused products, cigarette, or tobacco products, as defined under Samish Tribal law.

(5) Nongovernmental Sales Prohibited. Only retailers wholly owned by the Samish Indian Nation shall be permitted to make sales of cigarettes, tobacco products or vapor products within Samish Indian Country.

(6) Tribal Tax Stamps – Cigarettes.

(a) All cigarettes sold by Tribal retailers shall bear a Tribal tax stamp.

(b) In order to enforce collection of the tax hereby levied, the Tribe shall design and have printed stamps that have a serial number or other discrete identification so that stamps may be traced to the wholesaler.

(c) The Tribe shall contract with a bank or other stamp vender to distribute the Tribal tax stamps or the Tribe may serve as the stamp vender; provided, that the Tribe has entered into a memorandum of agreement with the State consistent with the compact to establish the value of the Tribal tax stamps. The stamp vender shall distribute stamps to wholesalers, upon payment of the applicable Tribal cigarette tax by the wholesaler, and remit the collected taxes to the Tribe.

(d) Wholesalers shall be responsible for affixing the Tribal tax stamps to the smallest container or package that will be handled, sold, used, consumed, or distributed, to permit the Tribe and the State to readily ascertain by inspection, whether or not such tax has been paid. Stamps shall be affixed so that the stamps may not be removed from the package or container without destroying the stamps. In the case of cigarettes contained in individual packages, as distinguished from cartons or larger containers, the stamps shall be affixed securely on each individual package.

(e) The Tribe may enter into agreements with wholesalers to reimburse the wholesaler for the cost of affixing the Tribal tax stamp.

(7) Taxes Imposed Upon Cigarettes.

(a) Tribal Cigarette Tax. There is levied and there shall be collected a tax upon the retail sales of all cigarettes which occur within Samish Indian Country. The tax shall be equal to 100 percent of the Washington State cigarette tax, subject to the phase-in period contained in subsection (20) of this section.

(b) Tribal Cigarette Sales Tax. There is imposed and shall be collected a tax, known as the Tribal cigarette sales tax, upon all sales of cigarettes within Samish Indian Country. Pursuant to the compact, the Tribal cigarette sales tax rate shall be equal to 100 percent of the Washington State and local retail sales tax, subject to the phase-in period contained in STC subsection (20) of this section.

(c) Increase or Decrease in State and Local Taxes. Should there be any future increase or decrease in the State and local cigarette taxes or retail sales taxes, the Tribal cigarette tax and Tribal cigarette sales tax shall increase or decrease by no less than 100 percent of the increase or decrease in the combined State and local tax rates.

(d) Rate of Cigarette Taxes Reflected in Tribal Tax Stamp. Consistent with subsection (6) of this section and the compact, all cigarettes sold within Samish Indian Country shall bear a Tribal tax stamp. The value of the Tribal tax stamp shall be the combined rates of the Tribal cigarette tax and Tribal cigarette sales tax.

(e) Exemption From Tribal Cigarette Tax and Tribal Cigarette Sales Tax. The following shall not be subject to the cigarette tax:

(i) Tobacco products or vapor products, as those terms are defined in this section, and sales of the same within Samish Indian Country.

(ii) Sales of cigarettes to Samish citizens for personal use.

(iii) Mail order type of cigarette sales, such as internet, catalog, and telephone sales, to buyers outside of Samish Indian Country or outside of Washington State.

(8) Tax Imposed Upon Tobacco Products.

(a) Tribal Tobacco Products Tax.

(i) There is imposed and shall be collected a tax upon the retail sales of all tobacco products which occur within Samish Indian Country. The Tribal tobacco products tax rate shall be set annually by regulation.

(ii) The Tribal tax on tobacco products shall be added to the selling price of all tobacco products sold within Samish Indian Country.

(b) Exemption From Tax. Sales of tobacco products to Samish citizens for personal use shall be exempt from the Tribal tobacco products tax.

(9) Tax Imposed Upon Vapor Products.

(a) Tribal Vapor Products Tax.

(i) There is imposed and shall be collected a tax upon the sale, use, consumption, handling, possession or distribution of all vapor products within Samish Indian Country. The Tribal vapor products tax rate shall be set annually by regulation.

(ii) The Tribal tax on vapor products shall be added to the selling price of all vapor products sold within Samish Indian Country.

(b) Exemption From Tax. Sales of vapor products to Samish citizens for personal use shall be exempt from the Tribal vapor products tax.

(10) Collection and Remittance of Taxes.

(a) All Tribal tobacco products taxes and Tribal vapor products taxes imposed by this section shall be collected from the buyer of any and all cigarettes, tobacco products and vapor products and shall be remitted to the Tribe on a quarterly basis.

(b) The amount of all Tribal tobacco products taxes and Tribal vapor products taxes received by a Tribal retailer in connection with the sale of any cigarettes, tobacco products and vapor products shall be retained by the Tribal retailer in a separate account for payment to the Tribe in accordance with this section.

(c) The Tribally authorized distributors of Tribal tax stamps shall only disseminate stamps to wholesalers, upon payment of the Tribal cigarette tax and Tribal cigarette sales tax by the wholesaler. Either the Tribally authorized distributors of stamps or the wholesalers shall remit the collected taxes to the Tribe, and shall do so on a quarterly basis.

(11) Use of Tax Revenue.

(a) Except as provided in subsection (11)(b) of this section, Tribal cigarette tax and Tribal cigarette sales tax revenue shall be expended solely for essential government services. Consistent with the compact, Tribal cigarette tax revenue may not be used to subsidize Tribal cigarette and food retailers. For the purposes of this section, “subsidize” means that proceeds from the Tribal cigarette tax and Tribal cigarette sales tax pursuant to the compact cannot be expended on the enterprise activities of the Tribal retail cigarette business. In addition, where the cigarette business is co-located with a retail food business, the proceeds cannot be expended to support that business.

(b) Tribal cigarette tax and Tribal cigarette sales tax revenue derived from sales of cigarettes manufactured by the Samish Indian Nation within Indian Country may be expended for any purpose.

(c) All Tribal tobacco products tax revenue and Tribal vapor products tax revenue may be expended for any purpose.

(12) Penalty for Resale. No person who purchases cigarettes, tobacco products or vapor products within Samish Indian Country shall resell the cigarettes, tobacco products or vapor products. Each such resale in violation of this subsection shall be a civil offense punishable by the following:

(a) A fine of $50.00 per sale;

(b) Costs of enforcement, including court costs; and/or

(c) A sum of money equal in value to the benefit the violator obtained by violating the terms of this section.

(13) Possession of Unstamped Cigarettes.

(a) No Tribal retailer shall possess unstamped cigarettes within Samish Indian Country.

(b) No person shall possess unstamped cigarettes within Samish Indian Country with intent to engage in a sale of such cigarettes.

(14) Purchase From Wholesalers.

(a) Retailers permitted to make sales of cigarettes pursuant to this section shall only purchase cigarettes from:

(i) Wholesalers or manufacturers licensed to do business in the State of Washington;

(ii) Self-certified wholesalers who meet the requirements of the compact;

(iii) Self-certified Tribal wholesalers who meet the requirements of the compact; and

(iv) The Samish Indian Nation or its enterprises as a Tribal manufacturer.

(b) Retailers permitted to make sales of tobacco products or vapor products pursuant to this section may purchase tobacco products or vapor products from any legal source.

(15) Records of Sales. All persons, including Tribal retailers, who are liable for collecting taxes under this section shall maintain accurate written records of the purchase, inventory, and sales of cigarettes, tobacco products and vapor products, including records to verify that Tribal cigarette and sales taxes were included in the price of the cigarettes sold to noncitizens and were remitted to the Tribe for deposit into Tribal accounts, and records documenting all tax-free sale of cigarettes to citizens, and shall make such records available for inspection by the Tribe and by the auditor. Records of sales of cigarettes manufactured by the Samish Indian Nation within Indian Country shall be kept separately from records of other cigarette sales. Records shall be maintained for no less than three years after an audit is completed and is accepted by the State and the Tribe.

(16) Reports of Sales. All Tribal retailers shall submit to the Tax Officer monthly reports of all sales of cigarettes, tobacco products and vapor products sold within Samish Indian Country. Tribal retailers shall also submit to the Tax Officer monthly reports of all purchases of cigarettes, tobacco products and vapor products. The monthly reports of sales and purchases shall be made on forms obtained from the Tax Officer, together with copies of all invoices for such purchases. Monthly reports shall be submitted at the same time and for the same periods that taxes are required to be paid.

(17) Minimum Age for Purchase. Cigarettes, tobacco products and vapor products shall not be sold to any person under the age of 21 years. All buyers appearing under the age of 40 shall be required to present photo identification to a retailer prior to the purchase of cigarettes or tobacco products.

(18) Audit Process.

(a) Policy. It is the intent of the Tribe to carry out regular audits consistent with the terms of the compact. The Tribe wishes to create a verification process intended to:

(i) Reconcile data from all sources that make up the stamping, selling, and taxing activities under the compact; and

(ii) Verify compliance with the taxes levied on cigarettes, tobacco products and vapor products.

(b) Selection of Auditor. The Tribe shall contract with an independent third-party auditor that is a certified public accountant in good standing. The Tribe shall be allowed to freely communicate with the auditor.

(c) Period Under Review.

(i) To verify the requirements of the compact, the auditor must review records for all years during the current appropriate audit cycle, and may review records for earlier years after the date of the signing of the compact only as necessary for an internal reconciliation of the entity’s books.

(ii) In situations where the auditor is responsible for verifying records on less than an annual basis, the period under review shall not include years previously reviewed by the auditor, except when a violation is alleged to have occurred during the period previously reviewed.

(d) Records to Be Examined. The auditor shall review the records specified below:

(i) For Self-Certified Wholesaler and Self-Certified Tribal Wholesaler. Records and invoices of stamp purchases, records and invoices of sales of stamped cigarettes, stamp inventory, and the stamping process;

(ii) For Tribal Retailers and Tribally Licensed Retailers. Records and invoices of cigarettes purchased from licensed wholesalers, self-certified wholesalers, self-certified Tribal wholesalers and manufacturers, records and invoices of cigarettes sold, cigarette inventory, and additional records necessary to verify whether Tribal cigarette tax revenue was used in accordance with the requirements of the compact to verify that the retail selling price included the applicable Tribal taxes; and

(iii) For the Tribe. Records necessary to verify that all applicable Tribal cigarette tax revenue was used to fund essential government services of the Tribe, and records documenting all tax-free sale of cigarettes to citizens.

(e) Audit Cycle.

(i) Initial Review. The first required review must cover the period starting on the effective date of the tax and ending one year thereafter. The auditor must report its findings to the Tribe within 60 days after the review.

(ii) Regular Review. Following the initial review, regular reviews shall take place during the regular audit period, which follows the Tribe’s fiscal year, with an audit report submitted at the conclusion of each audit.

(iii) Audit Cycle Agreement. The Tribe and Department may by prior joint agreement select or vary the audit cycle depending on the ongoing audit activity of the Tribe, in order to be efficient and effective in the use of auditor resources.

(19) Civil Penalties and Forfeiture.

(a) In addition to any other civil or criminal fine, forfeiture or other penalty that may be provided in any other section of the Samish Tribal Code, any person found by the Tribal Court to have violated any provision of this section shall be subject to any or all of the following civil penalties:

(i) A fine in an amount not less than $50.00 or more than $5,000 per violation; provided, that for the purpose of assessing a fine, each day that the person is in violation of this section is a separate violation;

(ii) Forfeiture as contraband of all cigarettes in the person’s possession, custody or control that do not bear a Tribal tax stamp or that are otherwise in the person’s possession, custody or control in violation of this section;

(iii) Forfeiture of any property as otherwise provided in the Samish Tribal Code.

(b) In addition to any civil or criminal fine, forfeiture or other penalty, any person found to have violated any provision of this section shall be required to pay any unpaid taxes required by this section, plus interest from the date such tax payment was due at a rate of 18 percent per year compounded monthly.

(c) In addition to any other civil or criminal fine, forfeiture or other penalty, and in addition to payment of all unpaid taxes required by this section:

(i) Any person found to have purchased within Samish Indian Country cigarettes that do not bear a Tribal tax stamp shall pay statutory damages to the Tribe in the amount of all Tribal cigarette taxes that would have been paid by a wholesaler if the person who was in possession of the unstamped cigarettes had obtained those cigarettes as stamped cigarettes in compliance with this section and the compact.

(ii) Any person found to have sold cigarettes without collecting or remitting to the Tribe the taxes imposed by this section, including by selling cigarettes that do not bear a Tribal tax stamp, shall pay statutory damages to the Tribe in the amount of all Tribal taxes imposed by this section on such cigarettes that were not collected or that were not remitted to the Tribe, plus applicable interest and penalties.

(iii) Any person found to have sold tobacco products without collecting or remitting to the Tribe the taxes imposed by this section shall pay statutory damages to the Tribe in the amount of all Tribal taxes imposed by this section, on such tobacco products that were not collected or that were not remitted to the Tribe.

(iv) Any person found to have sold vapor products without collecting or remitting to the Tribe the taxes imposed by this section shall pay statutory damages to the Tribe in the amount of all Tribal taxes imposed by this section, on such vapor products that were not collected or that were not remitted to the Tribe.

(20) Phase-In Period for Tribal Cigarette Taxes Only.

(a) No sooner than the date of enactment, the Tribe shall impose and maintain in effect a tax on retail sales of cigarettes equal to 80 percent of the State taxes.

(b) No later than 36 months after the initial imposition of a tax under the compact and subject to the phase-in reduction under this subsection, the Tribe shall impose and maintain in effect a tax on the retail sale of cigarettes equal to 100 percent of the State taxes, as calculated in the cigarette and sales tax factor Memorandum of Understanding. [Res. 2023-10-018 §§ 1, 2, 2023; Res. 2021-07-011 § 2, 2021.]