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Tobacco reservations Run a Google search on "tax-free cigarettes" and hundreds of links pop up. Check the Web sites and one will find addresses where cartons of name-brand cigarettes can be purchased without paying taxes. Many of the businesses are located on Indian reservations, which in this case are using their special status as "independent nations" to skirt federal and state laws. Approximately 414 million packs of tax-free cigarettes were sold over the Internet last year alone. A bill known as the Internet Tobacco Sales Enforcement Act is pending in the House. It would close the Internet loophole on tobacco products and should be passed. It is important to clarify that the legislation is not an Internet sales tax. It applies only to tobacco products and firms up tobacco-specific laws on the books already. For example, the Jenkins Act of 1949 mandates that tobacco retailers declare cigarette sales that cross state lines. The Internet Tobacco Sales Enforcement Act merely applies the Jenkins Act to mail-order and Internet retailers that currently disregard federal and state laws on interstate commerce. The law would allow states to collect taxes on cigarettes sold and shipped from reservations to state residents and would empower state attorneys general to enforce other tobacco-related state regulations, such as laws that require vendors to verify age for tobacco sales. The main argument that Indian tribes are making against closing the loophole is that it is a violation of the unique sovereignty of their "nations." This line is used to prevent most laws from affecting tribes, but there is nothing novel or threatening in the application of some national law to reservations. The most obvious example is that it is not legal to deal illicit narcotics from Indian lands. Other federal laws that have been applied to reservations include the Amber Alert legislation, the Clean Water Act, the Safe Drinking Water Act and the Hazardous Materials Transportation Act. None of these laws tolled the death knell for Indian independence. Indian tribes have launched a major lobbying effort to kill the legislation because they are making millions of dollars and avoiding taxes through sales to people who never visit a reservation. The tax-free exemption for Indian tribes is intended to apply to business on site, but mail-order or Internet commerce is not conducted on the reservation and can reach thousands of miles outside of the reservation for customers. This condition is simply an abuse of the Indian reservation privileges. The Senate version of the Internet-tobacco bill does not apply to Indian reservations. It should be amended, the House bill approved and this loophole to avoid the law closed.
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