Source: http://www.ago.ne.gov/ag_opinion_view?oid=2216
Timestamp: 2013-12-10 11:36:43
Document Index: 246662943

Matched Legal Cases: ['§ 476', '§ 77', '§ 77', '§ 77', '§ 77', '§ 77', '§ 77', '§ 77', '§ 77']

AGO Opinion 98005
Back to Opinion Listing Imposition of Nebraska Cigarette Tax on CigarettesManufactured by the Omaha Tribe of Nebraska and Sold by the Tribe on Its Reservation in Nebraska.
Opinion 98005
SUBJECT: Imposition of Nebraska Cigarette Tax on CigarettesManufactured by the Omaha Tribe of Nebraska and Sold by the Tribe on Its Reservation in Nebraska.
REQUESTED BY: M. Berri Balka, State Tax Commissioner
You have requested our opinion concerning whether Nebraska's
cigarette tax may be imposed on cigarettes manufactured by the
Omaha Tribe of Nebraska and sold by the Tribe on its reservation in
Nebraska. I. FACTS
A. The Omaha Tribe's Cigarette Manufacturing Plant.
The Omaha Tribe of Nebraska [the "Tribe"] is a federally
recognized Indian Tribe organized pursuant to the Indian
Reorganization Act of 1934, 25 U.S.C. § 476, under a Constitution
and Bylaws ratified by the members of the Tribe on February 15,
1936, and approved by the Secretary of the Interior on March 30,
1936. The Tribe occupies reservation land in Nebraska and Iowa
constituting the Omaha Indian Reservation [the "Reservation"]. The Tribe, doing business as the "Omaha Nation Tobacco
Company," has established a facility to manufacture cigarettes
within the boundaries of the Tribe's Reservation. The
manufacturing facility is located on land in Nebraska held in trust
by the United States for the benefit of the Tribe. The Tribe
reportedly spent $900,000 to initiate the cigarette manufacturing
operation. It has been reported that the Tribe brought in an
outside consultant to establish the plant, and that, at least
initially, some of the plant employees were nonmembers of the
Tribe. The Tribe does, however, intend to staff the operation with
tribal members. The Tribe has applied for and obtained a federal
license to operate as a manufacturer of tobacco products, as well
as a Nebraska wholesaler's license. The Tribe is engaged in on-
Reservation sales of its cigarettes to both members and nonmembers
of the Tribe. B. Nebraska's Cigarette Tax.
Nebraska imposes an excise tax of thirty-four (34) cents on
each package of cigarettes sold in the State. Neb. Rev. Stat.
§ 77-2602(1) (1996). Cigarette wholesalers are required to stamp
cigarettes sold to retailers in the State, and to collect and pay
the cigarette tax to the Tax Commissioner. Neb. Rev. Stat. §§ 77-
2603 and 77-2602(1) (1996). Neb. Rev. Stat. § 77-2602.01 (1996)
provides: "The impact of the [cigarette] tax. . .is hereby
declared to be on the vendee, consumer, or possessor of cigarettes
in this state, and when such tax is paid by any other person, such
payment shall be construed as an advance payment, and shall
thereafter be added to the price of the cigarettes and recovered
from the ultimate consumer or user." Proceeds from the cigarette
tax are dedicated to several purposes. Twenty-one (21) cents of
the tax on each package of cigarettes is deposited in the General
Fund. Neb. Rev. Stat. § 77-2602(1 (1996). Varying amounts of the
tax are deposited in other funds, including: the Nebraska Outdoor
Recreation Development Cash Fund; the Department of Health and
Human Services Finance and Support Cash Fund; the University
Facilities Fund; the State College Facility Fund; the City of
Omaha Public Events Facilities Fund; the Secure Youth Confinement
Facility Fund; the Building Renewal Allocation Fund, the Nebraska
Capital Construction Fund, and the Municipal Infrastructure
Redevelopment Fund. Neb. Rev. Stat. § 77-2602(1)(a) to (h). Since 1976, the Department has required all cigarette
wholesalers to stamp all packages of cigarettes sold to retailers
located on reservations in Nebraska. The retailer can then sell
the stamped cigarettes to Indians tax-free provided the retailer
distinguishes on his or her records the exempt cigarette sales from
the nonexempt cigarette sales. Since the retailer has already paid
the cigarette tax to the wholesaler, the retailer can issue to the
cigarette wholesaler a Nebraska Credit Computation for Cigarettes
and Tobacco Products Sold to Native American Reservation Indians,
Form 68. The wholesaler then credits the retailer's account for
the amount of credit claimed on Form 68. The wholesaler attaches
Form 68 to their next purchase order for cigarette stamps and is
allowed a credit for the amount of cigarette tax allowed the
III. QUESTIONS PRESENTED
You have asked us to address three questions:
1. May the Tribe be required to affix Nebraska cigarette tax
stamps on each package of cigarettes sold on the Reservation in
2. If the Tribe may be required to affix cigarette tax stamps
to packages of cigarettes, is the Department required to allow the
Tribe to obtain stamps for cigarettes sold to non-tribal members on
the Reservation without prepayment of cigarette tax, or may the
Department continue to follow its present procedure as outlined
3. If the Tribe may be required to affix cigarette tax stamps
to packages of cigarettes, what remedies can be pursued if the
Tribe fails to do so?
For the reasons set forth below, we conclude that Nebraska is
preempted from imposing its cigarette tax on cigarettes
manufactured and sold by the Tribe on its Reservation. Therefore,
the Tribe may not be required to affix Nebraska cigarette tax
stamps on packages of cigarettes sold by the Tribe on its
Reservation. As we conclude that the Tribe may not be required to
affix Nebraska cigarette tax stamps on cigarettes produced and sold
on its Reservation, we need not address your second and third
Generally, "[t]he federal purposes implicit in setting aside
Indian country for the residence of a tribe -- self-government and
economic support -- preempt state jurisdiction to tax Indians or
Tribes therein, unless Congress authorizes the tax." F. Cohen,
Handbook of Federal Indian Law , 406 (1982 ed.) [hereinafter
"Cohen"]. "[W]hen a State attempts to levy a tax directly on an
Indian tribe or its members inside Indian country, rather than on
non-Indians, [the Court has] employed, instead of a balancing
inquiry, `a more categorical approach: `[A]bsent cession of
jurisdiction or other federal statutes permitting it', [the Court
has] held, a State is without power to tax reservation lands and
reservation Indians." Oklahoma Tax Comm'n v. Chickasaw Nation, 515
U.S. 450, 458, 115 S. Ct. 2214, 2220-21 (1995) (quoting County of
Yakima v. Confederated Tribes and Bands of Yakima Nation, 502 U.S.
251, 258, 112 S. Ct. 683, 688 (1992) (citation omitted)). Applying
this "categorical approach," the U. S. Supreme Court has "held
unenforceable a number of state taxes whose legal incidence rested
on a tribe or on tribal members inside Indian country." Oklahoma
Tax Comm'n v. Chickasaw Nation, 515 U.S. at 458, 115 S. Ct. at
2220. See, e.g., Bryan v. Itasca County, 426 U.S. 373 (1976)
(personal property tax); McClanahan v. Arizona State Tax Comm'n,
411 U.S. 164 (1973) (state net income tax). "The initial and frequently dispositive issue in Indian tax
cases, therefore, is who bears the legal incidence of the tax." Oklahoma Tax Comm'n v. Chickasaw Nation, 515 U.S. at 458, 115 S.
Ct. at 2220. "When the incidence is on the Indian party or on both
parties, the tax is invalid under the rule that states lack taxing
jurisdiction over Indians in tribal Indian country absent
congressional consent." Cohen, at 413. "But if the legal
incidence of the tax rests on non-Indians, no categorical bar
prevents enforcement of the tax; if the balance of federal, state,
and tribal interests favors the State, and federal law is not to
the contrary, the State may impose its levy,. . ., and may place on
a tribe or tribal members `minimal burdens' in collecting the
toll." Oklahoma Tax Comm'n v. Chickasaw Nation, 515 U.S. at 458,
115 S. Ct. at 2220 (citations omitted). The legal incidence of Nebraska's cigarette tax is on the
ultimate consumer. See Neb. Rev. Stat. § 77-2602.01 (1996) ("The
impact of the [cigarette] tax. . .is hereby declared to be on the
vendee, consumer, or possessor of cigarettes in this state,. . .
."). Thus, with respect to imposition of the tax on non-Indian
purchasers or consumers, Nebraska's tax is not necessarily
prohibited; rather, "a more particular analysis is required." Cohen, at 413.
The U. S. Supreme Court has noted "two independent but related
barriers to the assertion of state regulatory authority over tribal
reservations and members." White Mountain Apache Tribe v. Bracker,
448 U.S. 136, 142 (1980). These barriers are the doctrines of
federal preemption and tribal self-government. "[They] are
independent because either, standing alone, can be a sufficient
basis for holding state law inapplicable to activity undertaken on
the reservation or by tribal members." Id. at 143. It is thus
necessary to address whether Nebraska's cigarette tax is precluded
by either of these two doctrines.
A. Federal Preemption.
In assessing whether a state tax or regulation of on-
reservation activities is preempted, it is necessary to make "a
particularized inquiry into the nature of the state, federal, and
tribal interests at stake, an inquiry designed to determine
whether, in the specific context, the exercise of state authority
would violate federal law." White Mountain Apache Tribe v.
Bracker, 448 U.S. at 145. "The question of whether federal law,
which reflects related federal and tribal interests, preempts state
activity is not controlled by the standards of preemption developed
in other areas." Hoopa Valley Tribe v. Nevins, 881 F.2d 657, 659
(9th Cir. 1989), cert. denied 494 U.S. 1055 (1990). "[A]mbiguities
in federal law are, as a rule, resolved in favor of tribal
independence." Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163,
177 (1989). "State jurisdiction is preempted by the operation of
federal law if it interferes or is incompatible with federal and
tribal interests reflected in federal law, unless the state
interests at stake are sufficient to justify the assertion of state
authority." New Mexico v. Mescalero Apache Tribe, 462 U.S. 324,
334 (1983). See also Cotton Petroleum Corp. v. New Mexico, 490
U.S. at 176-77; Ramah Navajo School Bd. v. New Mexico, 458 U.S.
832, 837-38 (1982). The Supreme Court has identified several
factors to be considered in determining if a state tax on non-
Indians is preempted, which "include the degree of federal
regulation involved, the respective governmental interests of the
tribes and states (both regulatory and revenue raising), and the
provision of tribal or state services to the party the state seeks
to tax." Cohen, at 413. The Court has also considered "whether
the value being taxed is generated on the reservation or is
attracted to the reservation solely by the claimed exemption from
state taxes." Id. (citing Washington v. Confederated Tribes of
Colville Indian Reservation, 447 U.S. 134, 155-57 (1980)). The State's primary interest in enforcing the cigarette tax is
to raise revenue for various governmental purposes. Twenty-one
(21) cents of the thirty-four (34) cent tax on each package of
cigarettes is dedicated to the State General Fund. Neb. Rev. Stat.
§ 77-2602(1) (1996). Varying amounts of the tax are deposited in
other funds, including: the Nebraska Outdoor Recreation
Development Cash Fund; the Department of Health and Human Services
Finance and Support Cash Fund; the University Facilities Fund; the State College Facility Fund; the City of Omaha Public Events
Facilities Fund; the Secure Youth Confinement Facility Fund; the
Building Renewal Allocation Fund, the Nebraska Capital Construction
Fund, and the Municipal Infrastructure Redevelopment Fund. Neb.
Rev. Stat. § 77-2602(1)(a) to (h). No part of the State's
cigarette tax revenue is specifically allocated to regulation of
the manufacture or sale of cigarettes or tobacco products. It can
logically be assumed that some measure of state governmental
services may be provided to nonmembers who purchase cigarettes
manufactured by the Tribe. Attempting to quantify these services,
however, is difficult, if not impossible. The State may also
provide some services beneficial to the Tribe's manufacturing
plant, such as highway access to and from the facility. With respect to federal interests, numerous acts of Congress
demonstrate "a firm federal policy of promoting tribal self-
sufficiency and economic development." White Mountain Apache Tribe
v. Bracker, 448 U.S. at 143. Indeed, the Court has recognized that
the "intent and purpose of the [Indian] Reorganization Act [of
1934]," under which the Tribe is organized, "was `to rehabilitate
the Indian's economic life and to give him a chance to develop the
initiative destroyed by a century of oppression and paternalism.'" Mescalero Apache Tribe v. Jones, 411 U.S. 145, 152 (1973) (quoting
H.R. Rep. No. 1804, 73rd Cong., 2d Sess., 6 (1934)). The Tribe's
production and sale of cigarettes on the Reservation will provide
employment for tribal members, and income generated by these
activities will be used to provide services to tribal members. The
revenues generated from the Tribe's manufacture and sale of its own
cigarettes will thus further the federal policy of fostering tribal
self-sufficiency and economic development. In addition, the plant
is located on land held by the United States in trust for the
Tribe. There is insufficient factual information available to
assess if any funds utilized by the Tribe to establish and maintain
its cigarette manufacturing plant were obtained from the federal
government. As to analysis of the tribal interests, the Tribe has an
obvious interest in that the manufacturing plant is a tribal
enterprise. The plant is owned by the Tribe, and was established
with tribal funds. The facility reportedly employs some tribal
members, and the Tribe's goal is to eventually staff the entire
operation with tribal members. Revenues generated by the
manufacture and sale of the Tribe's cigarettes on the Reservation
will allow the Tribe to provide needed services to its members on
the Reservation. Nebraska's cigarette tax, if imposed on
cigarettes manufactured and sold by the Tribe on its Reservation,
would be based on value generated by the Tribe's activities on the
Reservation. Balancing the state, federal, and tribal interests presented
in this case, we conclude that the State's interest in raising
revenues from on-reservation sales to non-Indians of cigarettes
manufactured by the Tribe is outweighed by the federal and tribal
interests in promoting tribal self-sufficiency and economic
development achieved by the employment of tribal members and
generation of revenues for the funding of tribal governmental
purposes. In reaching this conclusion, we believe the key factor
tipping the balance in favor of preemption is the burden placed on
the "value" generated by the Tribe's on-reservation activities if
Nebraska's tax is imposed on cigarettes manufactured and sold by
the Tribe on its Reservation.
On various occasions, state efforts to regulate or tax
activities or transactions involving non-Indians on Indian
reservations have been held to be preempted by federal law. See,
e.g., California v. Cabazon Band of Mission Indians, 480 U.S. 202
(1987) (regulation of bingo games conducted on tribal
reservations); White Mountain Apache Tribe v. Bracker, 448 U.S.
136 (1980) (motor vehicle taxes imposed on non-Indian logging
company contracting with tribe to sell, load, and transport timber
on reservation); Hoopa Valley Tribe v. Nevins, 881 F.2d 657 (9th
Cir. 1989), cert. denied 494 U.S. 1055 (1990) (timber yield tax
assessed against non-Indian purchasers of tribal timber); but see
Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163 (1989)
(upholding state taxation of oil and gas extraction by non-Indian
company on reservation because of substantial state services to and
interest in regulating the industry). "That a tribe plays an
active role in generating activities of value on its reservation
gives it a strong interest in maintaining those activities free
from state interference. . . ." Gila River Indian Community v.
Waddell, 967 F.2d 1404, 1410 (9th Cir. 1992); see also Washington
v. Confederated Tribes of Colville Indian Reservation, 447 U.S.
134, 156-57 (1980) (noting tribal interest in raising revenues for
government programs "is strongest when the revenues are derived
from value generated on the reservation by activities involving the
Tribe[ ]. . .," while the state's interest in raising revenues is
"strongest when the tax is directed at off-reservation value. . .
."). The significance of a tribe's role in activities creating
"value" on its reservation in assessing if state taxation or
regulation of conduct involving non-Indians is preempted is
emphasized in the U. S. Supreme Court's decision in California v.
Cabazon Band of Mission Indians, 480 U.S. 202 (1987). In Cabazon,
the Court rejected California's attempt to regulate bingo games
conducted on the reservations of the Cabazon and Morongo Bands of
Mission Indians. The Court noted that "the Tribes [were] not
merely importing a product onto the reservations for immediate
resale to non-Indians. . .," but "[were] generating value on the
reservations through activities in which they have a substantial
interest." 480 U.S. at 219-20. The Court applied this same principle in New Mexico v.
Mescalero Apache Tribe, 462 U.S. 324 (1983), in holding that New
Mexico was preempted from enforcing its gaming laws against non-
Indians engaging in hunting and fishing activities on the tribe's
reservation. Rejecting New Mexico's claim that it could assert
jurisdiction over non-Indians engaging in such activities on the
reservation, the Court stated, in part:
The assertion of concurrent jurisdiction by New Mexico
not only would threaten to disrupt the federal and tribal
regulatory scheme, but also would threaten Congress'
overriding objective of encouraging tribal self-
government and economic development. The Tribe has
engaged in a concerted and sustained undertaking to
develop and manage the reservation's wildlife and land
resources specifically for the benefit of its members. The project generates funds for essential tribal services
and provides employment for members who reside on the
reservation. This case is thus far removed from those
situations, such as on-reservation sales outlets which
market to nonmembers goods not manufactured by the tribe
or its members, in which the tribal contribution is de
minimis.. . .The Tribal enterprise in this case clearly
involves `value generated on the reservation by
activities involving the Trib[e].'
462 U.S. at 341 (quoting Washington v. Confederated Tribes of
Colville Indian Reservation, 447 U.S. 134, 156-57 (1980) (emphasis
In the present case, the Tribe's manufacture of cigarettes
(or, perhaps, other tobacco products) involves the generation of
value by the on-Reservation production of tribal goods. It is true
that courts have generally applied the preemption doctrine to
taxation of goods or products linked to a tribe's on-reservation
resources. E.g. White Mountain Apache Tribe v. Bracker) (timber);
Crow Tribe of Indians v. Montana, 819 F.2d 895 (9th Cir. 1987),
aff'd 484 U.S. 997 (1988) (coal); New Mexico v. Mescalero Apache
Tribe (hunting and fishing rights). While the Tribe is importing
the materials necessary to produce its tobacco products, as opposed
to harvesting an on-reservation resource, this does not alter the
fact that the value of the products results from the expenditure of
tribal resources. Thus, we believe that Nebraska may not tax the
value created by the Tribe's on-Reservation manufacture and sale of
its cigarettes.
We recognize that the U. S. Supreme Court, on several
occasions, has upheld the imposition of state cigarette taxes on
cigarettes sold to non-Indians by retailers located on tribal
reservations. See Oklahoma Tax Comm'n v. Potawatomi Indian Tribe, 498 U.S. 505 (1991); California State Bd. of Equal. v. Chemehuevei
Indian Tribe, 474 U.S. 9 (1985); Washington v. Confederated Tribes
of Colville Indian Reservation, 447 U.S. 134 (1980); Moe v.
Confederated Salish and Kootenai Tribes, 425 U.S. 463 (1976). Significantly, however, each of these cases involved state taxes on
cigarettes purchased from non-reservation manufacturers and
wholesalers and sold at tribal smokeshops; none of the cases
involved cigarettes produced on the reservation by the tribe. The
following passage from the Court's decision in Colville recognizes
the importance of this distinction: It is painfully apparent that the value marketed by the
smokeshops to persons coming from outside is not
generated on the reservations by activities in which the
Tribes have a significant interest. . . .What the
smokeshops offer these customers, and what is not
available elsewhere, is solely an exemption from state
taxation. . . .We do not believe that principles of
federal Indian law, whether stated in terms of pre-
emption, tribal sovereignty, or otherwise, authorize
Indian tribes to market an exemption from taxation to
persons who would normally do their business elsewhere.
447 U.S. at 155. The Ninth Circuit, summarizing the reasoning employed by the
Court in Colville and the other "tribal smokeshop" cases upholding
state taxing power, stated:
In Colville,. . .[t]he cigarettes sold by reservation
stores to non-Indians [did] not incorporate materials
produced on tribal land, nor [did] the tribes participate
in any meaningful way in their design or manufacture. The tribes simply import[ed] the cigarettes onto the
reservation, where they [were] sold to individuals who
[took] them back off. The only value the tribes
proffer[ed] to the general public [was] the value in not
having to pay the state sales tax which would otherwise
apply. Neither the federal government nor the Tribes
have a legitimate interest, the Court concluded, in
marketing this sort of tax loophole.
Gila River Indian Community v. Waddell, 967 F.2d at 1409.
A number of recent federal court decisions since Colville
recognize the issue of whether a state tax reaching on-reservation
transactions involving non-Indians is preempted hinges largely on
the Tribe's involvement in the activity giving rise to the tax. On
three occasions, the Ninth Circuit has determined that the state's
interest in imposing a tax reaching such transactions was
sufficient to overcome a preemption claim. Salt River Pima-
Maricopa Indian Community v. State of Arizona, 50 F.3d 734 (9th
Cir.), cert. denied ___ U.S. ___, 116 S. Ct. 186 (1995) (upholding
state sales tax on non-Indian goods sold on reservation by non-
Indian sellers to non-Indian buyers.); Gila River Indian Community
v. Waddell, 91 F.3d 1232 (9th Cir. 1996) (upholding transaction
privilege tax on sale of tickets and concessionary items in
connection with sporting and entertainment events conducted on the
reservation by non-Indian lessees.); Yavapai-Prescott Indian Tribe
v. Scott, 117 F.3d 1107 (9th Cir. 1997), petition for cert. filed
Prescott Convention Center, Inc. v. Scott, No. 97-788, 66 U.S.L.W.
3355 (U.S. Nov. 18, 1997) (upholding business transaction privilege
tax on room rentals and food and beverage sales by non-Indian
lessee of hotel located on reservation.). In each case, the Ninth
Circuit Court of Appeals noted the absence of significant tribal
involvement in the production or provision of the goods and
services subject to tax. Salt River Pima-Maricopa Indian Community
v. State of Arizona, 50 F.3d at 738 (the tribe "contribute[d]
relatively little to the value of the products and services sold.
. . ."); Gila River Indian Community v. Waddell, 91 F.3d at 1238
(finding the tribe's "assertions regarding its `active role in
generating activities of value on the reservation' [were]
unsupported by the record."); Yavapai-Prescott Indian Tribe v.
Scott, 117 F.3d at 1112 (majority finding that, as to the sales
tax, the tribe "contribute[d] virtually nothing to the food and
beverage sales of the Hotel. . .," and, with respect to the room
tax, that the tribe failed to carry its burden of proving "an
active role" in contributing to the value of the hotel.). Here, in contrast to these decisions, the cigarette
manufacturing plant is owned and operated by the Tribe, employs
tribal members, and is engaged in producing and selling goods on
the Tribe's reservation. On balance, we believe these factors tip
the scales in favor of finding that Nebraska's cigarette tax is
preempted with regard to on-Reservation sales of cigarettes
produced by the Tribe.
B. Tribal Self-Government.
In addition to preemption, "state regulatory authority over
tribal reservations and members" may be invalidated if "it
unlawfully infringe[s] `on the right of reservation Indians to make
their own laws and be ruled by them.'" White Mountain Apache Tribe
v. Bracker, 448 U.S. at 142 (quoting Williams v. Lee, 358 U.S. 217,
220 (1959)). "The self-government doctrine differs from the
preemption analysis and is an independent barrier to state
regulation." Crow Tribe of Indians v. Montana, 819 F.2d 895, 902
(9th Cir.), aff'd 484 U.S. 997 (1988). Either is a "sufficient
the reservation or by tribal members." White Mountain Apache Tribe
v. Bracker, 448 U.S. at 143. "Whether a state tax infringes on
tribal sovereignty depends on the extent to which tribal self-
government is affected." Gila River Indian Community v. Waddell,
91 F.3d at 1239.
We have determined that Nebraska's cigarette tax is preempted
with regard to on-Reservation sales of cigarettes produced by the
Tribe. Accordingly, it is not necessary for us to address whether
the independent barrier to state taxation presented by the doctrine
of tribal self-government would preclude application of Nebraska's
cigarette tax. IV. CONCLUSION
Based on the foregoing, we conclude that Nebraska is preempted
from imposing its cigarette tax on cigarettes manufactured and sold
by the Tribe on its Reservation. Therefore, the Tribe may not be
required to affix Nebraska cigarette tax stamps on packages of
cigarettes sold by the Tribe on its Reservation. We emphasize that
our conclusion is limited to cigarettes manufactured and sold by
the Tribe on its Reservation. If the Tribe were to sell its
cigarettes outside the Reservation, Nebraska's cigarette tax would
not be preempted. See Oklahoma Tax Comm'n v. Chickasaw Nation, 515
U.S. 450, 463-64 (1995) (immunity of Indians and Indian tribes from
state taxation "does not operate outside Indian country."). Also, Nebraska is not precluded from taxing cigarettes purchased by
others from the Tribe and sold in Nebraska. As the Tribe is not
required to stamp cigarettes sold on its Reservation, however,
enforcement and collection of the tax in such a situation presents
obvious problems. The Department may wish to consider seeking
amendments to the cigarette tax statutes to ensure adequate
enforcement and collection mechanisms exist to deal with this possible circumstance. If requested, we would be willing to
discuss any potential legislative changes which could aid the
Department in enforcing the Act.