PROVIDENCE -- A federal judge ruled yesterday that the state acted properly in shutting down the Narragansett Indian tribe's tax-free smoke shop, saying that the state has the right to tax cigarette sales on the tribe's land.
US District Judge William Smith's ruling followed a violent raid in July in which State Police arrested seven tribal members who tried to block their advance into the trailer where the cigarettes were being sold.
The federally recognized tribe argued that as a sovereign nation, it is free from the state's taxation laws. The state argued that according to the terms of the 1978 settlement agreement that gave the tribe its land in Charlestown, the tribe is bound by state statutes.
Smith found that the cigarette tax falls on the tobacco consumer, not the tribe, which means the tribe is simply an agent for collecting a tax.
"It is appropriate for the state to impose this burden on the tribe; and such a burden does not amount to taxation of the tribe, nor does it violate the tribe's sovereign rights," Smith wrote in his ruling.
Smith said the tribe must comply with the state's taxation laws if it wants to continue selling cigarettes. He also wrote that the state was right to execute a search warrant at the store. Narragansett Chief Sachem Matthew Thomas said the tribe would probably appeal the ruling. Thomas said he would recommend an appeal to the tribal council, which was expected to meet within a few days.