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LANCE MORGAN: Buying cigarettes on a reservation might require proof of race

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Editor's note: This column originally appeared in the Omaha World Herald. 

Did you know that tribal reservations are the only place where the color of your skin determines the price you pay for some basic products?

When the foundations of Federal Indian law were being established in the 1880s, tribal members were 50 years from even being recognized as citizens of the United States. After large areas of tribal land were taken away, many non-Indians found themselves living on reservations and didn’t want to be subject to tribal rules. Through a series of U.S. Supreme Court rulings, a legal system emerged to limit tribal governmental power over non-Indians who now lived on tribal land. When these old court decisions are applied in a modern context, they are hard to believe because they are so overtly race-based.

Tribes and states have been evolving away from some of these anachronistic rulings as tribal governments developed. Nebraska has actually been fairly enlightened when it comes to tribal relations. Nebraska retroceded criminal jurisdiction back to tribes. Nebraska has settled multiple tax issues with innovative approaches, and generally allowed tribes to focus on expanding their economies with minimal state interference. However, Nebraska is being pushed by outside corporate interests to take an outdated approach to tribal tobacco tax issues.

On Oct. 1, the State of Nebraska started requiring retailers on tribal reservations to use official State Form 68, which relates to tobacco sales. Tribal retailers are required to ask and document the answers to a series of questions when someone is standing in line to buy a pack of Marlboros. The most relevant of the seven questions: Are you Native? If so, what kind of Native? Can you prove it? Once this initial racial and subracial determination is done, we can then figure out what price to charge.

Twenty years ago, we had a shortcut button on our old cash register that was jokingly labeled “White people” and if we pushed that button, the state required we charge a different price. Now because of Form 68, we will likely need to add buttons for “White people,” “Winnebago Indians” and “Others.”

Why is this being done? In the late 1990s, Nebraska sued and settled a lawsuit with the major tobacco companies. Nebraska gets about $40 million per year from the settlement, but it had strings attached. The settlement basically gave Big Tobacco a monopoly and created incentives for Nebraska to protect Big Tobacco’s market share. The settlement also claimed it applied to the Indian tribes even though we weren’t a party to the lawsuit. Years later, Big Tobacco withheld money from Nebraska because the Winnebago Tribe refused to comply with Big Tobacco’s settlement.

Nebraska settled its dispute with Big Tobacco by agreeing to implement this more restrictive race-based tax system. Nebraska is now in a bad position. It must weigh alienating a relatively small tribal interest versus the possibility of losing $40 million a year. As a student of history, I don’t really like our chances.

There is a solution that doesn’t require Natives to prove they are Native every time they buy cigarettes on their own reservation. We had this same problem 15 years ago with gas tax. The Winnebago Tribe entered into a tax compact with Nebraska that shares a tribal gas tax that is based on jurisdiction, not race. We have offered this option to the state on several occasions, but Big Tobacco is lurking in the background insisting on the most restrictive racial version, which tribes will be against on principle. I am not exactly shocked you can’t trust Big Tobacco, but I am hopeful that Nebraska and the tribes can reach an agreement that is more 2021 than 1880.

Lance Morgan is a member of the Winnebago Tribe of Nebraska and the CEO of Ho-Chunk Inc. He is a graduate of the University of Nebraska-Lincoln and Harvard Law School.

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