HCI DISTRIBUTION

MSA COMPLIANCE

State Tobacco Tax Agreements

To sell tobacco under state jurisdiction, tobacco products must comply with the Master Settlement Agreement (MSA). The MSA has created state partnerships with Big Tobacco companies to ensure that Big Tobacco maintains their market share — a required condition for preserving MSA payments — while working to restrict Tribal tobacco operations or put them out of business. Tribal sovereignty is a threat to the state and Big Tobacco’s highly profitable business partnership.The MSA is a mechanism the states use to keep Big Tobacco in business and tribes in poverty.

Under pressure from states some tribes have entered into State Tobacco Tax Agreements that usually offer tribes a small percentage of state tax revenues in exchange for a state tax stamp on Tribal tobacco products, but exclude them from sharing in lucrative MSA and Escrow fees they collect.

Before entering into or negotiating state compacts that may seriously restrict tribal income potential
you must be fully aware of the complex issues and consequences involved.
HCI Distribution can help you:

Review your current Tribal/State Tax Agreement(s)
Steer a course through the complex environment of MSA regulations
Help you set up a profitable Tribal Tax Infrastructure
Assist you to negotiate or renegotiate a favorable state tax compact
Make sure your product adheres to the rules in applicable state tax jurisdictions

Council of State Governments report:

Trends Alert: Tobacco Settlement And Declining State Revenues

States’ efforts to maintain
Big Tobacco’s market share
pure hypocrisy… …More

States Receive Huge MSA Payments and Tribes Get Nothing
More