Judge: Yakama Tobacco Subject To Federal Taxes - NBC Right Now/KNDO/KNDU Tri-Cities, Yakima, WA |

Judge: Yakama Tobacco Subject To Federal Taxes

SPOKANE, Wash. - A ruling by a federal judge in Spokane could charge a Yakama Nation tobacco company tens of millions of dollars in tax liability.

U.S. District Judge Rosanna Malouf Peterson said last week that King Mountain Tobacco Company is not exempt from paying a federal excise tax on cigarettes. In a case filed last year, prosecutors said the company owes more than $23M in taxes since 2009.

King Mountain argued that federal law bars taxes on income derived from trust land, such as tobacco growing or logging. The company also cited the 1855 treaty between the Yakamas and the U.S. government.
Howver, the judge held that only some of tobacco sold by King Mountain is grown on the reservation. Much of the rest is imported from Virginia and the judge said that therefore the company must pay the federal tax.