United States v. Wilbur

In a Cigarette Tax Contract (“CTC”), the state’s retrocession of taxes applies only to the sale of cigarettes by licensed “Indian retailers”, as defined in the CTC. The sale of untaxed, unstamped, “contraband” cigarettes on tribal land is a violation of the Contraband Cigarette Trafficking Act (“CCTA”).

Defendants Martin Wilbur, Joan Wilbur, April Wilbur and Brenda Wilbur are members of the Swinomish Indian Tribe and own a cigarette store located on tribal lands. Defendants were in indicted on several charges, including an eight-year conspiracy, from 1999 to 2007, to sell “contraband” cigarettes and violating the CCTA. The district court denied defendant’s motion to dismiss. In exchange for the right to appeal their motion, defendants pled guilty to the conspiracy charges. Defendants began selling untaxed and unstamped cigarettes in 1999. The Swinomish tribe entered into a standard CTC in 2003, in which the state retroceded all applicable state taxes upon cigarettes sold by licensed “Indian retailers.” Defendants obtained a cigarette retail license in 2005, which was revoked in 2007. The Court found that during the time periods that the defendant’s were unlicensed, the Swinomish CTC did not apply, and therefore defendant’s sale of untaxed, unstamped cigarettes was a violation of CCTA. However, from 2005 to 2007, when the defendants possessed an “Indian retailer” license the CCTA did not apply. The charges of conspiracy prior to 2005 were barred by the statute of limitations and therefore set aside. The Court affirmed the conspiracy charges after 2007, finding that two separate conspiracies occurred, interrupted by the two years the defendants held a license, which made their alleged conspirative activities legal. AFFIRMED in part; REVERSED in part; and REMANDED.