Marking a victory for state-tribal relations, Gov. Kevin Stitt and the Chickasaw Nation have entered into new agreements on tobacco tax revenue and motor vehicle registrations.
After months of negotiations, Stitt and Chickasaw Nation Gov. Bill Anoatubby finalized on Jan. 12 new, 10-year compacts. The agreements were first made publicly available late last week.
The agreements come after the Oklahoma Legislature passed legislation last year to extend tribal tobacco and motor vehicle registration compacts for one year when Stitt and some tribal leaders appeared to be at a stalemate in negotiations. Stitt vetoed those bills and challenged the compact extensions in court after the Legislature overturned his vetoes. The Oklahoma Supreme Court has yet to rule in that case.
In a statement, Anoatubby said the new agreements are good examples of what the state and the tribes can accomplish when working together. He also thanked lawmakers for giving the Chickasaw Nation more time to hash out the compacts.
“We built on areas of agreement without waiving or limiting the rights of either party or requiring either party to yield on matters where there may still be legal dispute,” Anoatubby said. “It has long been our policy to exercise sovereignty and pursue sound intergovernmental agreements. This work, done properly, strengthens the Chickasaw Nation and Oklahoma.”
Stitt said in a statement he welcomes other tribes to the negotiating table. State records show Stitt and the Apache Nation finalized a new tobacco compact on Jan. 3.
“We now have fully executed tobacco compacts with both the Chickasaw and the Apache tribes that maintain jurisdictional continuity in Oklahoma,” Stitt said. “We also finalized a car tag compact with the Chickasaw tribe that ensures Oklahoma law enforcement can confidently identify vehicles on the road and guarantees that our turnpikes can read tribal tags.”
Major portions of the compacts remain the same as previous agreements. However, the tobacco compact includes some language tweaks, including new terms on the “compact jurisdiction,” specifying the agreement only applies to tribal allotments and Chickasaw Nation land held in trust by the federal government.
In light of the U.S. Supreme Court’s McGirt ruling, which found that much of eastern Oklahoma remains reservation land, Stitt pushed to renegotiate the compacts that referred to a federal definition of “Indian Country.” He expressed concerns that agreeing to new compacts with that language could give the tribes the upper hand in McGirt-related litigation, including a case that could decide whether more tribal citizens are exempt from state income taxes.
Also included in the tobacco compact is new language stipulating the agreement shall not be “deemed an admission relevant to any matter outside of its express terms, nor shall any of those terms be invoked for any purpose not relating to the Nation’s retail sale of tobacco products within the compact jurisdiction.”
The state and the tribe will continue to evenly split tax revenue from tobacco products sold within the Chickasaw Nation.
The state and the tribes have compacted on tobacco tax revenue for decades owing to a U.S. Supreme Court ruling in 1991 that affirmed Oklahoma’s right to collect such taxes from non-Natives in Indian Country. Under federal law, Indigenous citizens are exempt from sales taxes on tobacco products sold on tribal land.
The tobacco compact will be in effect through 2034, at which time either the state or the tribe could unilaterally terminate the agreement. Otherwise, the agreement will automatically renew for another decade.
The Chickasaw Nation characterized its new motor vehicle compact, which governs the terms of car registration, licensing and the issuance of tribal plates to its citizens, as a simple update that renewed existing terms. That compact, but not the tobacco compact, will have to be approved by the Legislature’s Joint Committee on State-Tribal Relations, according to the Chickasaw Nation.
It’s unclear if Stitt’s compacts with the Chickasaw Nation will thaw the governor’s frosty relations with some other tribes. Just two days before Anoatubby signed the new compacts, the Chickasaw Nation governor and other leaders of Oklahoma’s Five Tribes released a joint statement indicating they would not participate in Stitt’s new McGirt task force.
“I continue to welcome other federally recognized tribes in Oklahoma to engage with my office in the compacting process,” Stitt said.
As the Oklahoma Department of Public Safety has cracked down on some tribal license plates and the Oklahoma Turnpike Authority’s new cashless tolling system has been unable to bill some drivers with tribal plates, Stitt has urged the tribes to compact on motor vehicle registrations.
Senate President Pro Tem Greg Treat, R-Oklahoma City, praised the new compacts as a step in the right direction and said he’s hopeful Stitt can continue fostering positive relationships with the state’s tribes.
Treat said he didn’t think the new agreements would have come to fruition if the Legislature hadn’t overturned Stitt’s vetoes of two bills offering one-year compact extensions.
The Chickasaw Nation was among the tribes that accepted an extension.
“This is a major win for the state of Oklahoma and our tribal partners,” Treat said in a statement. “It also highlights the importance of the progress we can make as a state when we work together.”
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