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Opinion 98005

DATE: January 22, 1998

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

WRITTEN BY: Don Stenberg, Attorney General

L. Jay Bartel, Assistant Attorney General




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

retailer.




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

Nebraska?




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

above?




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

questions.




III. ANALYSIS




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

added).




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

basis for holding state law inapplicable to activity undertaken on

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.


Very truly yours,




DON STENBERG

Attorney General




L. Jay Bartel

Assistant Attorney General