A new tobacco shop in Cloverdale is prompting complaints that its American Indian owners enjoy an unfair advantage by not charging sales tax.
When Native Tobacco 101 opened this month, it not only brought cheap cigarettes to Cloverdale, it also touched on a national controversy over Indian smoke shops and the taxes they sometimes avoid.
The shop manager confirmed he does not charge any state or other taxes, such as the 9 percent sales tax his competitors are required to levy.
"It seems to me an unfair business practice," said Cloverdale Mayor Carol Russell, who worries about the effect the new business may have on several "mom and pop" stores that sell tobacco.
"What is it about tobacco that allows one group not to pay taxes and another group to pay?" she said. "It puts other retailers at a disadvantage."
Chuck Gerken, manager of Native Tobacco 101, said the owners are working with a Native American company licensed to use the land and operate the tobacco business, but he declined to provide more detail.
Most of the tobacco he sells is made by Indians on Native American lands in the states of Washington and New York, he said.
A pack of Smoking Joes, for example, advertised at $2.75, "is $2.75 out the door," he said, with no additional taxes.
"People are very happy," Gerken said. "For those who elected to smoke or chew (tobacco) in today's times, we make it affordable."
But his competitors are not pleased.