Law & Principles
Ray Carter | August 8, 2023
Oklahoma lawmakers’ actions may have dramatic impact
State-tribal tobacco compacts, recently enacted by lawmakers over Gov. Kevin Stitt’s objections, contain language that federal records indicate could allow tribes to claim a dramatic expansion of territory subject to the compacts, potentially diverting tens of millions of dollars in tax collections away from the state.
Federal records show the legislatively enacted compacts could expand the territory subject to state-tribal agreements by up to 18,200 percent for six tribes.
Existing state-tribal compacts on tobacco-tax collections allow tribes to receive 50 percent of all tobacco taxes collected through tribal smoke shops. For the last decade those compacts have been focused on tribal sales on property considered “Indian country” under federal law.
But the meaning of that term has changed.
The U.S. Supreme Court’s 2020 ruling in McGirt v. Oklahoma declared the Muscogee (Creek) Nation’s historic Oklahoma reservation was never formally disestablished for purposes of federal major-crimes law. That ruling has since been expanded to include other tribes—the Choctaw, Chickasaw, Cherokee, Seminole, and Quapaw. The historic reservations of the six McGirt tribes cover most of eastern Oklahoma, about 42 percent of the state, or roughly 28,000 square miles.
For the past decade, state-tribal tobacco compacts’ reference to “Indian country” was understood to apply primarily to land held in federal trust for a tribe.
But now, due to McGirt, tribal government officials from the six tribes could now argue that their tobacco compacts apply to any outlet owned by a tribal member lying within the aforementioned 28,000 square-mile area, even if the land is not in trust and even though most of that property is owned by non-Indians.
With the compacts set to expire, Stitt sought slight changes that would preserve the status quo as it existed for the past decade with tribal governments still raking in millions from a 50-50 split on tobacco sales at tribal outlets on trust land.
Stitt’s proposed compact limited the agreement to tobacco sales “on lands owned by the Nation and/or its members which are held in trust by the United States, or which are owned by members of the Nation and are subject to restricted title.”
But the tribes instead demanded, and state lawmakers agreed to enact, one-year compacts that retain language saying the agreements apply to a tribal nation’s “Indian country.”
Records obtained from the federal Bureau of Indian Affairs show that 29 tribes have a combined 1,958,995 acres held in trust in Oklahoma. That translates into just under 3,061 square miles.
The six “McGirt” tribes that could benefit from legislators’ compact language—the Muscogee (Creek), Choctaw, Chickasaw, Cherokee, Seminole, and Quapaw—combined have just under 97,760 acres in trust, which is nearly 153 square miles.
Under the compact language adopted by lawmakers, those six tribes may now be able to claim the compacts apply to any business owned by a tribal member within approximately 28,000 square miles.
As a result, under the compact language adopted by state lawmakers, the territory potentially covered by those six tribes’ tobacco compacts could expand by up to 18,200 percent.
Under current tobacco compacts, tribes have received about $57 million in annual tobacco-tax payments. It is not known how much that figure could increase under potential McGirt-related expansion of new tribal outlets, but the growth could be significant.
Legislative leaders have publicly claimed that tribal officials assured them no expansion will be sought under the tobacco compacts as a result of McGirt.
But tribal leaders have refused to sign the compact agreements offered by Stitt, which would put such promises in writing, and legislative leaders have offered no explanation for why tribal officials would refuse to sign new compacts that align with their alleged promises.
During a recent press conference, Stitt said the explanation is obvious.
“The question is why wouldn’t the tribes sign the compact that I offered?” Stitt said. “It’s only about this land.”
Tribal leaders have said little in public about potential expansion of their tobacco-compact territory via McGirt. But they have offered at least one non-verbal clue.
A photo that ran in The Oklahoman showed tribal government leaders literally high-fived each other after the Legislature voted to override Stitt’s veto and enact compacts with the tribe’s preferred language that could allow expansion.
Director, Center for Independent Journalism
Ray Carter is the director of OCPA’s Center for Independent Journalism. He has two decades of experience in journalism and communications. He previously served as senior Capitol reporter for The Journal Record, media director for the Oklahoma House of Representatives, and chief editorial writer at The Oklahoman. As a reporter for The Journal Record, Carter received 12 Carl Rogan Awards in four years—including awards for investigative reporting, general news reporting, feature writing, spot news reporting, business reporting, and sports reporting. While at The Oklahoman, he was the recipient of several awards, including first place in the editorial writing category of the Associated Press/Oklahoma News Executives Carl Rogan Memorial News Excellence Competition for an editorial on the history of racism in the Oklahoma legislature.