Only one area violator is found. Creek Nation stores, however, use low-tax stamps.

After years of violating a tobacco compact with the state, Cherokee-licensed smoke shops are being pressed to sell properly taxed cigarettes with in the Tulsa area, a Tulsa World investigation shows.

Meanwhile, smoke shops licensed by the Creek Nation continue to sell low-tax cigarettes in the Tulsa area without a tobacco agreement with the state. Tulsa, a high-tax zone, requires an 86-cent compact stamp.

The Tulsa World purchased cigarettes last week at 22 area smoke shops or stores. The stores are affiliated with the Cherokee, Creek and Osage nations and are in Glenpool, Sapulpa, Sand Springs, Broken Arrow, Claremore and Tulsa.

Sixteen of the 22 stores were selling cigarettes with a low-tax stamp. That’s 72 percent of the smoke shops surveyed.

Low-tax cigarettes are typically reserved for sale near the Oklahoma state line so smoke shops there can compete with the tax rates of adjacent states.

Yielding to pressure from the tribe and a recent arbitration ruling, the Cherokee-affiliated stores are showing a significant turnaround, compared with previous surveys by the World.

Six out of seven Cherokee smoke shops were using the proper 86-cent stamp, the rate set in a 2004 compact between the Cherokees and the state.

Mike Miller, a spokesman for the Cherokee Nation, said the tribe was actively encouraging smoke shops to avoid selling cigarettes from store to store.

The tribe’s tax commission notified all Cherokee-licensed smoke shops in a letter March 27 that that they could no longer engage in retail-to-retail sales that would send cigarettes with low-value tax stamps into other tax zones.

“Any retailer engaging in retail-to-retail sales after today may be subject to suspension of their license,” the letter states.

Miller said tribal tobacco retailers are getting the message.

“It shows that the licensees have gotten the letter, understand what the letter means and are acting accordingly,” he said. “That’s also what we’ve found in our inspections.”

The World’s investigation, however, found that a Cherokee-affiliated store at 1418 N. Sheridan Road continues to sell low-tax cigarettes in violation of the compact.

The 6-cent tax stamps used by the smoke shop, First American Tobacco Co., give it a $3 to $4 advantage per carton over nontribal stores, which must purchase cigarettes with a $1.03 stamp.

The smoke shop’s manager, Scott Gable, would not comment Friday on why it was selling low-tax cigarettes.

Miller said Cherokee tax officials were inspecting the inventory at the more than 50 tribal shops and that they would likely complete the job in three to four weeks.

So far, he said, the tax officials had not found any violators. First American Tobacco had not been inspected as of last week, he said.

Oklahoma’s new cigarette tax, which took effect in 2005, aims to curb smoking habits and raise money for health initiatives.

After years of disagreement with the state over the new tobacco compact, the Cherokees suffered a damaging blow by an arbitration ruling that says the tribe violated the compact and should be held accountable for damages to the state. The arbitration ruling was released in March.

The ruling may slow the sale of low-tax cigarettes by Cherokee stores; however, smoke shops licensed by the Creek Nation continue to sell cigarettes with 6-cent stamps throughout the Tulsa area.

The World bought cigarettes at 14 Creek-affiliated stores. All were using the low-tax stamps.

A previous World investigation showed that the cigarettes were supplied by Cherokee and Osage stores along the Oklahoma border. Those smoke shops have sold hundreds of thousands of cartons of low-tax cigarettes into the Tulsa area.

Six Cherokee smoke shops can purchase an increased number of 6-cent stamps under a restraining order granted by a Mayes County judge in January 2006.

Miller said the Cherokee Nation was monitoring the stores to ensure that they are not selling low-tax cigarettes into the Tulsa market.

“We’re not allowing the shops in the court case to transfer cigarettes to other tax zones,” he said. “They are probably not going to buy as many because they can’t resell them outside the (low-tax) zone.”

Miller said tribal tax agents are also requiring stores in low-tax zones to account for the cigarettes they sell so the tribe can learn whether a store is engaging in retail-to-retail sales.

The Oklahoma Tax Commission has asked Mayes County Judge James Goodpaster to remove the restraining order, records show.

If the Tax Commission’s motion is granted Tuesday, it would be authorized to limit the number of low-tax cigarettes the six smoke shops can purchase.