TALLAHASSEE — In an attempt to suppress the sale of tax-free cigarettes sold on Florida's Indian reservations, state senators want the tribe's smokes labeled "Indian cigarettes'' and any non-Indian caught with them forced to pay a $1,000 fine and face misdemeanor charges.
The provision was tacked onto a Senate bill to raise the cigarette tax $1 per pack late Tuesday night. Lawmakers fear that when the tax hike takes effect, buyers will flood Indian reservations to get the lower-priced cigarettes and undercut state tax collections.
"This is a way to prevent untaxed cigarettes from being sold in our state," said Sen. Thad Altman, a Melbourne Republican who sponsored the amendment in the Senate Ways and Means Committee. "I really don't think the intent is to start throwing folks in jail."
The state now loses about $8.6 million from the sales of 26 million packs of cigarettes sold each year at smoke shops on the Seminole and Miccosukee reservations, according to the Florida Department of Business and Professional Regulation. Because the tribes are sovereign nations, the state can't prevent them from selling cigarettes and it can't force tribal stores to collect the state tax.
If lawmakers approve the plan to raise the cigarette tax from 34 cents per pack to $1.34 per pack, and impose a $1 per ounce tax on cigars and smokeless tobacco, estimates are that the state will raise about $1 billion. But that does not include the lost revenue from tobacco purchases on tribal land, purchases made on the Internet and from other sources. That amount could soar to more than $68 million.
State economists said Wednesday that the penalties on any nontribal purchasers of the tax-free cigarettes would likely reduce the tax loss by a third or more, because the measure will be hard to enforce.
Currently, wholesalers sell cigarettes to the Indian reservations for retail sales.
Under the Senate plan, they would carry a "Indian cigarettes'' stamp and be restricted in sale to the approximately 3,500 tribal members in Florida. Anyone else caught with a tax-free pack could be charged with a first-degree misdemeanor and fined $1,000 or five times the value of the product seized, whichever is greater.
A spokesman for the Seminole Tribe said the focus on cigarette sales is misplaced when lawmakers could more efficiently spend their time trying to complete the gambling compact between the state and the tribe.
"The tribe respects the Legislature's need to raise more money, but believes it could generate a lot more money by approving the compact," said Gary Bitner, Seminole Tribe spokesman.
The Senate bill also requires that state regulators spend $50,000 on a public awareness campaign alerting smokers that buying tax-free cigarettes from the tribes is illegal. And it encourages the state, as part of the compact, to negotiate revenue sharing on tobacco products in lieu of the new law.
The Senate initially planned to encourage local police to enforce the law by giving law enforcement agencies half the fees collected for any products seized. But several lawmakers balked at the prospect of returning to the days of "cash register justice."
"I urge you to rethink that policy and the far-reaching consequences," said Sen. Alex Villalobos, a Miami Republican. The committee then stripped the enforcement enticement from the bill.
At least one senator suggested that making it illegal to purchase cigarettes from tribal smoke shops was overkill.
"There's some that suggest that maybe our prisons are full of folks because of minor marijuana convictions. Now we're going to have our prisons full of folks that are buying cigarettes?" asked Sen. Carey Baker, a Eustis Republican. "Just wondering what might be the unintended consequences."
The House has not yet taken up the cigarette tax.
Mary Ellen Klas can be reached at firstname.lastname@example.org.