(CN) – The 10th Circuit dismissed the Muscogee Creek Nation’s claim that the Oklahoma Tax Commission directed state troopers to illegally search its trucks and seize $107,000 worth of untaxed cigarettes.
Oklahoma law requires tribal smoke shops to affix tax stamps, bought from the state, to each package of cigarettes before it’s sold to anyone outside the tribe.
“Purportedly suspicious that Muscogee Creek Nation was supplying off-reservation Oklahoma smoke shops with unstamped cigarettes, the Oklahoma Tax Commission … directed the state highway patrol to stop [the tribe’s] vehicles” outside Indian country for inspection, the ruling states.
Troopers seized unstamped cigarettes allegedly worth $107,000.
The tribe sued, arguing that the trucks had been stopped and searched illegally, and that the seized cigarettes should be returned or the tribe compensated for their loss.
The state argued that it would have lost tax revenue had the cigarettes been sold.
The district court agreed, with the Denver-based 10th Circuit upholding its decision.
Judge Bobby Baldock, writing for the three-judge panel, said the tribe “points to no law other than the Indian Commerce Clause that might override or preempt the authority of the commissioners to seize [the tribe’s] unstamped cigarettes outside Indian country.”
And Baldock said the Supreme Court has shut down all claims that the Indian Commerce Clause blocks state taxation of matters that significantly affect a tribe’s interests.