Data on national sales of cigarettes sold on Indian reservations is conspicuously difficult to find but there is substantial data from a sampling of states. In Oklahoma, reservation sales of cigarettes accounted for 45 percent of the state’s total for 2007. In 2003, sales of cigarettes on reservations in Michigan jumped to 3.4 million packs, from 327,000 in 1995. Washington loses $60 million per year in tax revenue to reservation sales.Continue Reading
A 2008 study estimated that cigarette sales on Indian reservations in New York totaled between 169 million and 219 million packs, or between 25 and 33 percent of the state’s cigarette sales in 2004. This estimate has grown to approximately 37 percent of the total of state sales as of 2015. The revenue lost to the state has tripled since 2004 from $65 million to over $180 million due to excise tax increases.
Factors that affect reservation sales include the reservations to the nontribal population, and the amount and frequency of increases in state and federal excise taxes. Approximately 70 percent of the smokers in western New York purchases cigarettes from reservations.
Placing accurate estimates on the amount of cigarettes sold on Indian reservations is difficult because many tribes are not subject to state taxation and reporting requirements. Officials once based estimates of the amount of lost tax revenue on data from wholesale distributors, but started collecting taxes from these entities, prompting many tribes to start selling their own native brands. Many state shave difficulty in apportioning lost revenue among reservation sales, Internet sales and sales in neighboring states with lower tax rates.Learn more about Health