43.06.510  <<  43.06.515 >>   End of Chapter

Vapor product tax contractsPuyallup tribe. (Effective October 1, 2019.)

(1) The governor may enter into a vapor product tax agreement with the Puyallup Tribe of Indians concerning the sale of vapor products, subject to the limitations in this section. The legislature intends to address the uniqueness of the Puyallup Indian reservation and its selling environment through pricing and compliance strategies, rather than through the imposition of equivalent taxes. The governor may delegate the authority to negotiate a vapor product tax agreement with the Puyallup Tribe to the department of revenue. The department of revenue must consult with the liquor and cannabis board during the negotiations. An agreement under this section is separate from an agreement under RCW 43.06.465.
(2) Any agreement must require the tribe to impose a tribal vapor product tax with a tax rate that is ninety percent of the state vapor product tax. This tribal tax is in lieu of the combined state and local sales and use taxes and the state vapor product tax, and as such these state taxes are not imposed during the term of the agreement on any transaction governed by the agreement. The tribal vapor product tax must increase or decrease at the time of any increase or decrease in the state vapor product tax so as to remain at a level that is ninety percent of the rate of the state vapor product tax.
(3) The agreement must include a provision requiring the tribe to transmit thirty percent of the tribal tax revenue on all vapor products sales to the state. The funds must be transmitted to the state treasurer on a quarterly basis for deposit by the state treasurer into the general fund. The remaining tribal tax revenue must be used for essential government services, as that term is defined in RCW 43.06.505.
(4) The agreement is limited to retail sales in which Indian retailers make delivery and physical transfer of possession of the vapor products from the seller to the buyer within Indian country, and are not in regard to transactions by non-Indian retailers. In addition, agreements may address the legal age of sale for vapor products pursuant to section 11, chapter 15, Laws of 2019.
(5)(a) The agreement must include a provision to price and sell the vapor products so that the retail selling price is not less than the price paid by the retailer for the vapor products.
(b) The tribal tax is in addition to the retail selling price.
(c) The agreement must include a provision to assure the price paid to the retailer includes the tribal tax.
(d) If the tribe is acting as a distributor to tribal retailers, the retail selling price must not be less than the price the tribe paid for such vapor products plus the tribal tax.
(6)(a) The agreement must include provisions regarding enforcement and compliance by the tribe in regard to enrolled tribal members who sell vapor products and must describe the individual and joint responsibilities of the tribe, the department of revenue, and the liquor and cannabis board.
(b) The agreement must include provisions for tax administration and compliance, such as transport and notice requirements, inspection procedures, recordkeeping, and audit requirements.
(c) The agreement must include provisions for sharing of information among the tribe, the department of revenue, and the liquor and cannabis board.
(7) The agreement must provide that retailers must purchase vapor products only from distributors or manufacturers licensed to do business in the state of Washington.
(8) The agreement must be for a renewable period of no more than eight years.
(9) The agreement must include provisions to resolve disputes using a nonjudicial process, such as mediation, and must include a dispute resolution protocol. The protocol must include a procedure for notifying the other party that a violation has occurred, a procedure for establishing whether a violation has in fact occurred, an opportunity to correct such violation, and a provision providing for termination of the agreement should the violation fail to be resolved through this process, such termination subject to mediation should the terms of the agreement so allow. An agreement must provide for termination of the agreement if resolution of a dispute does not occur within twenty-four months from the time notification of a violation has occurred. Intervening violations do not extend this time period.
(10) Information received by the state or open to state review under the terms of an agreement is subject to RCW 82.32.330.
(11) It is the intent of the legislature that the liquor and cannabis board and the department of revenue continue the division of duties and shared authority under chapter 82.25 RCW.
(12) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Indian country" has the same meaning as provided in RCW 82.24.010.
(b) "Indian retailer" or "retailer" means:
(i) A retailer wholly owned and operated by an Indian tribe; or
(ii) A business wholly owned and operated by an enrolled tribal member and licensed by the tribe.
(c) "Indian tribe" or "tribe" means the Puyallup Tribe of Indians, which is a federally recognized Indian tribe located within the geographical boundaries of the state of Washington.
(d) "Vapor products" has the same meaning as provided in RCW 82.25.005.

NOTES:

Conflict with federal requirementsEffective date2019 c 445: See RCW 82.25.900 and 82.25.901.
Automatic expiration date and tax preference performance statement exemption2019 c 445: See note following RCW 82.08.0318.
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