HCN: Tribal tobacco tax wars in Washington

Business | Law

Wednesday, August 12, 2009

"Alison Gottfriedson was no stranger to breaking state and federal laws. She was arrested repeatedly as a teenager in the 1960s and '70s for fishing in areas that were off-limits to Indians. She and her family ultimately won a victory for Indians throughout the Northwest — the right to half of the fish harvest in their traditional fishing areas.

When Gottfriedson died last month at age 57, she was embroiled in yet another battle for Native sovereignty: the right to sell tax-free cigarettes in her smoke shop at Franks Landing, south of Seattle.

In its heyday, cars looped around the garish smoke shop awaiting their turn at the drive-through window, while lines of smokers stretched through the front door, emerging with stacks of cartons of Marlboros, Newports and Camels. Signs boasting rock-bottom prices were posted near tribal paraphernalia, making the message clear: These deals are possible only on Indian land. Federal law states that only Indians can buy tax-free cigarettes, and smoke-shop clerks are required to check IDs. But Gottfriedson — and countless other smoke-shop owners — sold tax-free tobacco to anyone.

It was a lucrative business. Gottfriedson and her husband, Hank, members of the Squaxin Island Tribe, made more than $20 million between 2001 and 2007, selling cigarettes to their customers for about half the price they would have cost anywhere else.

But in May 2007, Gottfriedson emerged from her home to find a row of guns pointed at her. A team of federal agents ransacked her smoke shop. Children at the nearby Wa He Lut School, which was largely funded by smoke-shop proceeds, watched the whole thing.

"I've always been controversial, ever since I was a girl," Gottfriedson said just weeks before her death."

Get the Story:
Cigarette wars (High Country News 8/12)