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Tobacco company on Yakama Nation loses treaty rights ruling

Filed Under: Business | Law
More on: taxation, tobacco, treaties, washington, yakama

A tobacco manufacturer on the Yakama Nation is not protected by an 1855 treaty, a federal judge ruled earlier this month.

Delbert Wheeler operates King Mountain Tobacco on his allotment on the reservation. But since he mixes his tobacco with products made off the reservation, he isn't covered by the Yakama Treaty of 1855, Judge Rosanna Malouf Peterson said.

“When taking into account the manufacturing process and the amount of nontrust-land tobacco that is used in King Mountain’s products, the court finds that the cigarettes and roll-your-own tobacco produced by King Mountain are not principally generated from the use of reservation land and resources,” Peterson wrote in the decision.

The federal courts have previously ruled that provisions in the treaty protect tribal commerce. But Peterson said exemptions from taxation must be explicit so Wheeler could be on the hook for $30 million in federal tobacco taxes.

"Enrolled members of federally recognized Indian tribes, as United States citizens, are subject to federal taxation unless explicitly exempted under federal law or by treaty," Peterson.

Turtle Talk has posted documents from the case, King Mountain Tobacco Co v. ATF.

Get the Story:
Yakama tribal cigarette maker could face $30M tax bill (The Yakima Herald-Republic 2/21)

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