Native American cigarette shops close
Black Hawk Tobacco Shop Inc., selling Native American cigarettes in four retail stores in the valley, has closed in the wake of a lawsuit by the California attorney general and a letter from the Agua Caliente Band of Cahuilla Indians.
The tribe’s letter, dated Feb. 17, advised the state of members’ concern that Black Hawk Tobacco was selling tobacco products on the Agua Caliente reservation illegally.
The letter gave the attorney general’s tobacco litigation and enforcement division the ammunition it needed to press for taxed cigarette sales.
Black Hawk Tobacco had claimed, as a defendant in the lawsuit filed in July, that it was exempt from California cigarette sales tax and other tobacco product sales because its business was being conducted in a retail store that was on Indian land.
Richard Milanovich, tribal chairman, wrote that Black Hawk Tobacco’s sovereign-status argument was without foundation.
Black Hawk Tobacco’s sales should comply with state cigarette tax law and tribal law, Milanovich said.
“The tribe (also) finds it curious, and more than a bit disconcerting that, although we are not in partnership with Black Hawk, nor do we approve of the illegal cigarette sales, (that) Black Hawk attempts to assert the tribe’s rights it possesses as a sovereign nation,” Milanovich wrote in the letter.
“The tribe wishes to make very clear to the Attorney General that Black Hawk’s continued illegal sale of cigarettes on the reservation is contrary to tribal law,” the letter said.
It concluded: It is an “impermissible attempt to use the tribe’s sovereign status as a way to further Black Hawk’s own economic interests as it surely would not conduct its sales on a sparsely populated, remote reservation.”
Black Hawk Tobacco’s lawyer did not return repeated calls to comment.
Calls to the stores, bearing “closed for remodeling” signs, were not answered.
Voluntary closure
The attorney general’s office said Black Hawk Tobacco owner Frederick McAllister voluntarily closed the stores after the tribe’s letter was submitted to Riverside County Superior Court. His attorney asked the injunction to be denied.
But the state is pressing for a ruling to prevent McAllister from selling cigarettes that are untaxed, bear no California tax stamp and are not certified as fire-safe.
“Our position is, if it’s illegal on the Agua Caliente reservation, it’s illegal anyplace else in the state of California,” said Senior Assistant Attorney General Dennis Eckhart.
State prosecutors said their investigation showed that Black Hawk Tobacco, which also operates a mail order business, bought 2,800 master cases of cigarettes — typically holding 50 to 60 cartons — between Jan. 26 and July 2, 2009. The tax on any of those cigarettes that would have been sold would be $8.77 per carton.
“Assuming that all these cigarettes were sold in California, several hundreds of thousands of dollars in taxes were not paid,” Eckhart said.
Riverside County Superior Court Judge John Evans said he would take the arguments under advisement.
The tribe has put other Native American tobacco stores on notice, among them: 7 Leaf Trading Post, which opened in January 2009 at 69-185 Ramon Road, Cathedral City.
Months ago, the Agua Caliente said it was not in business with 7 Leaf Trading Post and was not a partner of the business.
The tribe also said the sale of cigarettes on reservation land must be done in compliance with California Cigarette Tax Law.
“We’ve sent 7 Leaf and two other tobacco stores letters to cease-and-desist from selling tax-free tobacco products,” Eckhart said.





