cigarette taxes

King Mountain Tobacco

A federal judge in eastern Washington has ruled a cigarette maker on the Yakama Indian Reservation owes $58 million in unpaid taxes and penalties.

The privately-owned tobacco company has tried, so far unsuccessfully, to assert a treaty right to trade tax free.

The U.S. Treasury Department went after King Mountain Tobacco Company for federal cigarette taxes unpaid since 2009. The cigarette factory is owned by a Yakama tribal member. The company's lawyers and the tribal government insist the reservation-based business is not subject to federal or state taxes.

Tax Foundation/Mackinac Center for Public Policy

Nearly half of the cigarettes smoked in Washington went untaxed by the state, according to a new study by two think tanks.

The study compared actual legal sales in a state against the level you would expect to see based on its smoking rate. From that, researchers came up with a smuggling estimate. The study pegs low-tax Idaho as a major source of smuggled cigarettes.

OLYMPIA, Wash. – The burgeoning roll-your-own cigarette industry in Washington is preparing to do legal battle against the state. Governor Chris Gregoire is expected to sign into law today a new tax on do-it-yourself smokes. That will likely trigger a lawsuit.