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"We don't need any more tax increases, and we certainly don't need an issue over taxes that creates ill will with our tribal brethren," declared Rep. Lenore Barrett, R-Challis.
Said Rep. Hilde Kellogg, R-Post Falls, "This bill doesn't solve anything, it just makes it worse. Please vote no."
All five of Idaho's Indian tribes opposed the bill, and the Idaho Indian Affairs Council, which Kellogg leads as chairwoman, voted against it earlier in the session. In fact, the House already had narrowly killed the bill once, when it was proposed as HB 135 by former Coeur d'Alene Rep. Don Pischner, who is now lobbying for a group of convenience stores.

House Majority Leader Lawerence Denney, R-Midvale, made several attempts to revive the bill after senators unsuccessfully tried to tack it onto an unrelated bill as an amendment. His final attempt, HB 455, pushed off the effective date of the new tax to July 1, 2004, a move Denney said allowed a chance for the state to negotiate with the tribes.
"I don't see this as a gun to the head," Denney told the House. "I see this as a way to force us to negotiate."
But House members disagreed so strenuously that the bill failed on an 18-52 vote, earning Denney the "crow," a black wooden bird that sits on the desk of a member who's gotten fewer than 20 votes on a bill he or she sponsored. The bird had been on Democratic Rep. Margaret Henbest's desk, and the Boise representative happily passed it on.

Alice Koskela, legislative affairs director for the Coeur d'Alene Tribe, praised the vote.
"Of course, the tribe is very pleased that this issue seems finally to have been laid to rest," she said. "It was a bad idea to begin with."
Idaho's tribes have been considering raising their own tribal cigarette tax rates if the state raises its cigarette tax. The Coeur d'Alene, Nez Perce and Shoshone-Bannock tribes all have informed legislators that they're considering proportionate increases, so that a state cigarette tax increase wouldn't increase the disparity between the state and tribal taxes.

Bill Roden, lobbyist for the Coeur d'Alene Tribe, said, "I do think there will be discussions over the summer and the fall between the Legislature and the tribes. They've all indicated a willingness to do that."
He added, "While it's been very frustrating, it's positive in the sense that the House indicated a willingness to let the negotiation process work without a hammer over their head."
David Kerrick, lobbyist for the Nez Perce Tribe, called the lopsided vote "quite a pleasant surprise."
Among North Idaho House members, only two -- Reps. Dick Harwood, R-St. Maries, and Wayne Meyer, R-Rathdrum -- voted in favor of the bill, while all the rest voted against it. Both Meyer and Harwood said they saw it as a fairness issue.

"We've got businesses right next door to the smoke shops that have to pay tax on those cigarettes," said Harwood, whose district includes the Coeur d'Alene Reservation. "It's just not fair."
Mark EchoHawk, who is filling in for Pocatello Rep. Elmer Martinez, told the House that tobacco sales are an important revenue source for Idaho's tribes.
"Indian reservations need economic development," he said. "This bill takes it away."

Kentuky enjoys Internet tobacco boom

LOUISVILLE - Higher cigarette taxes in other states are leading smokers to buy their cigarettes over the Internet from companies based in Kentucky and other low-tax states.
While the increased sales are bringing added tax revenues to Kentucky, the practice is costing other states. It is coming under increased scrutiny from the U.S. General Accounting Office, the investigative arm of Congress.
At least 10 online retailers out of about 150 nationwide are operating in Kentucky. Kentucky's 3 cents-a-pack tax is levied, but the buyer avoids taxes at home, which can reach $1.50 a pack or higher.
An April 2001 assessment from Forrester Research Inc., which the GAO cites in its report out this week, estimates that Internet tobacco sales in the United States will exceed $5 billion in 2005, and that high-tax states will lose about $1.4 billion in revenue.

Under a 1949 federal law known as the Jenkins Act, cigarette dealers are required to report out-of-state sales to the buyer's state's tobacco tax administrator.
Violating the Jenkins Act is a misdemeanor. It is rarely, if ever, enforced.
Many online cigarette sellers argue that they are not required to comply with the Jenkins Act. Some cite the Internet Tax Freedom Act. Others say they are located on American Indian reservations, which are sovereign lands exempt from cigarette taxes.